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16-18 June 2020 • Moscow • Crocus Expo

Russia & the Gulf states improve oil & gas relations

When two titans of energy clash, sparks fly – and major business opportunities present themselves too. Russia and its Gulf State partners are getting closer and closer, which heralds unique collaboration on key oil & gas projects.
Russia & the Gulf states improve oil & gas relations
It’s interesting to see, given the major contributions Russia, the UAE, and Saudi Arabia contribute to worldwide oil & gas supplies. All are potential global markets leaders. However, all parties involved know the business potential cooperation brings. 
Let’s take a look at what the future holds for increasingly close Russo-Gulf oil & gas collaboration.

More investment from Gulf states in Russian oil & gas

Siberian oil field

Russia’s substantial resources, and willingness to extract them, makes it a highly attractive investment prospect. That’s even with Russia under international sanctions.
Despite this, companies around the Persian Gulf are eyeing up further investment opportunities throughout key Russian oil & gas territories.
“Cooperation in energy sector is developing either in oil and gas,” Art Melikyan, the UAE’s Trade Representative to Russia, said. “They include production control, joint investments in upstream operations and others under consideration.”
Such investments are already being put in place. Abu Dhabi-based Mubadala Petroleum has purchased a 44% stake in Gazpromneft-Vostok, operator of 13 oil fields in the Tomsk and Omsk regions of Western Siberia. The Russian Direct Investment Fund, which brokered the deal, confirmed it had gone ahead in September 2018.
Dr. Bakheet Al Katheeri, CEO, Mubadala Petroleum, said: "The acquisition of a 44% interest in the Gazpromneft-Vostok joint venture is another important step in Mubadala Petroleum’s drive for sustainable and profitable growth, marking our entry into Russia and adding valuable oil production to our existing portfolio. 
“Partnering with Gazprom Neft, a leading Russian operator, and RDIF will not only provide us with significant co-investment opportunities, but will also further develop our own oil and gas expertise and capabilities, as well as exploration and production technologies.”
The fields in question, currently operated solely by Gazpromneft-Vostok, have proved and probable reserves of 300mn barrels of oil. In 2017, its Tomsk and Omsk acreages produced 33,000 bpd of oil.
In June 2018, Vladimir Putin and Abu Dhabi’s Crown Prince, Sheikh Mohammed bin Zayed, signed a strategic partnership. This covers further cooperation in the oil & gas sphere. According to the terms of the declaration, the new deal aims at “providing balance and stability on the global oil market.”

Qatar increases cooperation with Russian oil & gas partners

Qatar gas island

In 2018, a year where Russia and Qatar celebrated a Year of Culture, celebrating diplomatic ties going back 30 years, both states inked agreements tightening their energy relationship.
Qatar’s sovereign wealth fund Qatar Investment Authority has raised its controlling stake in Russian NOC Rosneft for roughly $11.3bn. With this, Rosneft itself is hoping to expand its presence in the Middle East’s extensive LNG sector.

Qatar itself is the world’s largest producer of liquid gas, whereas Russia holds the largest natural gas reserves worldwide. In preparation for further collaboration, Rosneft opened a Qatar office and R&D Centre in March 2018. Further developments in petrochemical research will be undertaken here.
Qatar Investment Authority’s increasing its stake Rosneft takes its total Russian oil & gas investments over $13bn, building on further historic deals. 

A new era of Russo-Saudi energy dominance coming soon?

Saudi refinery from above
Throughout most of recent history, Saudi Arabia and Russia have held the top two places in global oil production. This shows no signs of slowing, especially with 2018 being a banner year for joint cooperation between the pair.
According to a report from Reuters, Russia and Saudi Arabia inked a secret deal in September to increase production. Originally, the two countries had hoped to announce an overall increase of 500,000 barrels per day (bpd) from Saudi-led OPEC and non-OPEC Russia at a gathering of oil ministers in Algiers at the end of September.
In October 2018, Saudi Oil Minister Khalid al-Falih confirmed his nation’s supply increases, with output standing at 10.7m barrels per day. Accordingly, Russia added 150,000 bpd in September, passing another post-Soviet production levels. 
Away from production agreements, though, Saudi firms are eyeing up significant cash investments on Russian projects. According to Oilprice.com, RDIF Head Kirill Dmitriev says Riyadh is ready to part with $5bn for a stake in Novatek’s Arctic LNG-2 Project in the Arctic Circle.
It is likely that if Aramco goes ahead with its investment it will use Novatek gas to replace oil for domestic electricity generation. Novatek is expected to select final international partners, adding to China’s CNPC and Total, on the Arctic LNG-2 Hub by Q3 2019.
Russian Energy Minister Alexander Novak says more Saudi inbound investment is coming.
“We have a number of good projects under discussion, including between Saudi Aramco, Sibur and Novatek,” Novak told Russian 24 state TV network.
Saudi Aramco has already inked a deal with Gazprom Neft on a joint technology centre in St Petersburg to tackle challenges facing oil reservoir development. 
Other deals in the pipeline between Aramco and Russian companies include one covering oil swaps and trading with Lukoil, gas cooperation "along the entire gas production chain" with Gazprom, and a wide range of projects with Russia's top oil producer Rosneft.

More oil & gas business opportunities between Russia and Gulf states emerging

The above all point towards one thing: heightened business activity between Russia and its allies in the UAE, Saudi Arabia and around the Persian Gulf. 
Whether these are in research, E&P, or in technology and equipment supplies, the deals are coming soon. 
Finding the correct platform to broker said deals, for Russian and Middle Eastern players, is vital. Luckily, the Moscow International Oil & Gas Exhibition (MIOGE) is here to provide the ultimate transaction and deal-making venue.

MIOGE 2019: Russia’s no.1 international oil & gas equipment exhibition 

MIOGE is the meeting place for the international community and Russia’s oil & gas industry. Over 560 companies trust the show to let them meet and do business with representatives from across the value chain.
Here, you’ll meet the players behind the Russian oil & gas projects listed above, as well as getting details on Russia’s project landscape from to 2025 and beyond. 
Find procurement, engineering and purchasing specialists exclusively at MIOGE.
Russian majors, including Gazprom, Tatneft, Rosneft and Lukoil, attend the show every year. Why? To meet new partners and suppliers of in-demand oil & gas equipment and technology. 
To reserve a stand, click here
Want more information on how MIOGE can help grow your business in Russia’s enormous oil & gas industry? Contact our team today.