The summit of energy companies will assemble the heads of industry majors, from upstream operators to equipment suppliers. The discussion will focus on the current issues of the fuel and energy sector.
The role of oil industry in ensuring sustainable economic growth and bridging the inequality gap.
Oil and gas projects contribute to creating stable jobs, support salary growth and decrease income gaps. The average salaries in Russian oil and gas provinces are higher than nationwide. Overall, fuel and energy orders, income and fiscal revenues from them contribute to the nation’s economic growth and wealth.
Oil majors’ resource capacity and production outlook.
According to the Union of Oil & Gas Producers, Russia’s reserve life is double than the global average – 24–30 years vs 12–15 years. However, Russia has much lower amounts of efficient reserves whose recovery is technologically and economically feasible.
Technologies for the oil industry.
DNV GL estimates that by 2025 oil and gas drilling will be fully automated. State-of-the-art systems for life cycle management at complex facilities will ensure efficient collection and storage of both external data (for example, sensor readings) and ideas, developments and documents made in operation.
Digital Oil Field and Integrated Operation on Oil Field technologies are of special interest. Experts believe these will spread worldwide in 10–15 years and Russia as a country with huge oil and gas reserves is set to become a powerhouse of technology advancement. For example, Tatneft uses its automated production control system with ongoing model recalibration.
Supply of capital: changing investment case in oil and gas.
In 2016, at the St. Petersburg International Economic Forum, Rosneft’s CEO Igor Sechin said weak oil prices and volatility had led to a loss of about USD 350 billion of investments worldwide, which would affect the whole market in the medium term.
According to a 2016 survey by Deloitte, oil and gas managers and experts say the key issues are restricted access to capital under sanctions and staff shortages (64% и 46%, respectively). Only 18% expect a greater investment inflow.
In 2016, the Ministry of Energy estimated the Russian fuel and energy sector’s investment appetite at RUB 30 trillion through 2020.
The role of the state in oil and gas.
Taxes are the most important factor for the industry. By 2018, Russia plans to transfer from production tax to excess-profit tax to be diversified based on returns on every specific project.
The state regulates what oil and gas companies do and protects their interests on the global arena. In 2016, with the support of Russia’s trade mission in Egypt, several Russian oil and gas companies were able to sign a number of lucrative contracts (for example, Rosneft joined the project of Zohr giant gas field development).
Since March 2017, Russia has been in talks with Iran on oil and gas contracts worth USD 10 billion. The Russian Government also contributed to signing the contract to increase oil supply to China to 91 million tonnes by 2023.
Besides, Russia has entered into agreements with 82 countries to avoid double taxation, which extends opportunities to do business overseas.
The future of natural gas business for oil companies.
ВР and the International Energy Agency estimate that in 2035–2040 the consumption of natural gas will grow by 1.6–1.9%. By 2040, the overall demand will grow by 50%.
Most oil majors produce natural gas as well. For example, in 2016 Shell made a decision to increase investment in gas projects (including liquefied natural gas). Rosneft plans to reach 100 billion cubic metres in production by 2020 (vs 67 billion cubic metres produced in 2016).