Oxford Energy Forum – Russian energy issues in a volatile environment – Issue 107
It is well known that Russia is heavily dependent on its energy sector, from both an economic and a political perspective. As a result, the fall in the oil price over the past two years and the dramatic changes taking place in the global gas market are having significant consequences for both the Kremlin and Russia’s domestic energy companies. However, instead of reviewing the increased risks for Russia from the change in global energy markets, this edition of the Oxford Energy Forum discusses how Russia has started to adapt its policies and commercial strategies in a number of different areas. Some of the new strategies appear very positive, while others carry inherent risks, but all show how the world’s largest producer of hydrocarbons is being forced to respond politically and commercially to the shock of lower commodity prices.
Vitaly Yermakov picks up this theme in a discussion of Russia’s, and Rosneft’s, growing relationship with India and its key oil and gas companies. He highlights two important trends, the first being a need to bring in partners who can help with the financing of new projects, and the second being Russia’s desire to find alternatives to Chinese investment in Russia, as the need to avoid dependence on Russia’s southern neighbour in the East is increasingly being seen as politically and commercially vital. He also highlights the continuation of a Russian ‘upstream–downstream’ strategy which has seen Rosneft take an interest in an Indian refining business to balance the upstream deals done in Russia.