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Russia can increase its global oil market share due to reduced competition

A reduced competition between producers is a result of a decline in investments in the industry

MOSCOW, September 8. /TASS/. In the future, Russia will be able to increase its share in the world oil market after a recovery in demand. This may be due to reduced competition between producers as a result of a decline in investments in the industry, Russian Energy Minister Alexander Novak wrote in his article for Energy Policy magazine.

"When demand begins to return to pre-crisis levels, it will be extremely important for Russia, like other oil-producing countries, to regain its market share as soon as possible and maybe even increase it in the face of reduced competition between producers. The prospects for a prompt increase in production in the future depend on the level of support for oilfield services in the present," the minister said.

According to his forecasts, in 2023-2025, a decline in the global oil supply is possible due to insufficient investment in production in 2020 due to the consequences of the coronavirus and the fall in oil prices. "This year, $170 bln less will be invested in oil and gas production than last year. Investments are likely not to recover fully in 2021 either. Such a protracted period of low investment, according to Rystad Energy forecasts, could lead to a loss of $5 mln barrels per day of world production," Novak added.

Novak recalled that the Energy Ministry has taken a number of measures to support the oilfield service to ensure the sustainability of the industry and preserve jobs as much as possible. For example, 12 oilfield service organizations have already been included in the list of backbone organizations of the Russian economy, and 5 more are under development.

At the same time, on behalf of the president of Russia, work is being carried out to form the stock of unfinished wells. The ministry has already prepared proposals to amend the Russian Tax Code in terms of establishing a tax deduction for creating a reserve of new facilities for the extraction of hydrocarbons. It includes state support for well drilling activities even if there is no production need during the OPEC+ deal.