Last year, Russian oil and gas companies expanded their investments in upstream projects (exploration, drilling and extraction) up to USD 58 bln, which was 38 percent more than the previous year. “The increase in investments in Russia resulted from increase in investments in oil and natural gas extraction in rubles and strengthening of the national currency,” Alexander Amiragyan, Deputy Head of the Department of Fuel and Energy Sector of the Analytical Center, commented on this situation in an interview with a Rossiyskaya Gazeta correspondent.
“The changes in the ruble exchange rate have affected the dollar denominated investment amounts. Thus, on average, in 2017, the ruble strengthened by 15 percent relative to 2016, which drove up dollar denominated investments,” the expert explained.
According to the Ministry of Energy of the Russian Federation, the ruble investments in oil production in 2017 were up ten percent as compared to 2016, primarily as a result of new projects being launched in the north and east of the country. According to the analyst, investments in the exploration of new natural gas deposits have also increased primarily as a result of new projects. These first of all include the exploration of the Chayandinskoye deposit to supply natural gas to the Power of Siberia project and the South Tambeiskoye deposit as part of the Yamal LNG project.
“On the whole, idea that the higher the oil prices, the faster the increase in investments is still fair as high prices give companies more financial resources to draw on,” Mr. Amiragyan summed up. This year, rising oil prices can help boost investments in upstream around the world by another five percent, the International Energy Agency forecasts. This process has been the most active in shale deposits in the USA. Meanwhile, the slowest growth has been witnessed in the most mature deposits in the Middle East, Russia and China. Shelf projects are in for another year of investment reduction….Read more