Russian Federation Oil and Gas Market - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

Russian Federation Oil and Gas Market - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

The Russian Federation oil and gas market is expected to grow at a CAGR of more than 3% during the forecast period of 2020-2025. Factors such as the reduction in the offshore drilling cost by 40% and an increase in the country's LNG exports are expected to drive the Russian Federation oil and gas market. However, the increasing use of renewable energy to meet energy needs is likely to restrain the Russian Federation oil and gas market.

• Russia, in 2019 was the second-largest oil producer, which is likely to make upstream the fastest-growing segment in the Russian Federation oil and gas market.
• Increasing exploration and production activities in the offshore deep and ultra-deepwater areas are expected to create several opportunities for the Russian Federation oil and gas market in the future.
• The increasing projects in downstream and midstream are expected to drive the Russian Federation oil and gas market during the forecast period.

• For the past several years, Russia has been in the top three oil and gas producers of the world. Most of the country's oil and gas is exported to other countries, which makes oil and gas a significant source of revenue generation.
• Russia, with the most abundant gas reserve in the world comprising 19.8% of the global gas reserve, is also the second-largest gas producer-only behind United States. With countries around the globe trying to reduce carbon emission by phasing out the coal-based power plant, the growing electricity demand and the natural gas demand for power generation are expected to increase.
• In 2019, the total crude oil production in Russia was 568.1 Million Tonnes (MT), which was higher than that of 2018, 563.3 MT. The increasing production of oil and gas in the country is likely to positively impact the Russian Federation's oil and gas market.
• Rosneft, a Russian partially state-owned upstream and midstream oil and gas company, has been actively producing oil and gas from its offshore fields. The company shipped 100 million metric tons of oil from its Sakhalin-1 and North Chaivo projects in 2018 and is expected to increase this production in the forecast period.
• The ban on technology purchases from United States has made it hard to develop complex shale and offshore projects; this has led to a shift from western technological partners to south and east, for assistance, and technological support. Chinese companies have been active in Russia in recent years in exploration in offshore fields, and Gazprom Neft has been actively talking with Chinese companies to develop the Chona project in Eastern Siberia.
• Therefore, owing to the above points, the upstream segment is likely to be the fastest-growing segment for the Russian Federation oil and gas market during the forecast period.

• Oil and gas pipelines, storage, and LNG, RLNG facilities, oil refineries, and raw natural gas purifying facilities are the significant midstream and downstream sectors. The growing oil and gas production and export, and aging pipeline infrastructure have driven the demand for new midstream investments. The increasing oil and gas production and rise in the number of expansion and modernization projects have driven the need for the downstream segment of the Russian oil and gas.
• Russia has been planning to launch a raft of new projects over the next few years, aiming to capitalize on the downstream sector's rapid growth. The Russian government is also planning to take further measures to encourage the petrochemical industry development, with a target of doubling production to around 20 million metric tons per year by 2030.
• In 2019, the total LNG exported from Russia was 39.4 billion cubic meters (bcm), higher than the country's exported value of 2018, 24.9 bcm. The increase in the exported value of the LNG exhibits a rise in the demand for LNG in the international market, which is likely to positively impact the country's oil and gas market.
• In April 2019, Cryogas-Vysotsk commenced full-scale production of liquefied natural gas (LNG). The project capacity was 660,000 tonnes per annum, and its infrastructure also includes a 42,000 cubic meters LNG storage tank and an offloading terminal designed to handle LNG carriers with a capacity of up to 30,000 cubic meters.
• Hence, owing to the above points, the increasing projects in the downstream and midstream segment are expected to drive the Russian Federation oil and gas market during the forecast period.

The Russian Federation oil and gas market is fragmented. Some of the key players in this market include Rosneft Oil Company PJSC, PJSC Gazprom, PJSC LUnited Kingdomoil Oil Company, Transneft Group, and PJSC ANK Bashneft.

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