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16-18 June 2020 • Moscow • Crocus Expo

What you can expect in 2019 for Russian oil & gas

2019 promises to deliver 12 opportunity-rich months in Russia’s mammoth oil & gas sector. We’ve made some exciting predictions and trends to watch out for, and take advantage of this, year for international companies.
What you can expect in 2019 for Russian oil & gas
Let’s dive in.

Top trends to watch in Russian out for in Russian oil & gas


Closer cooperation between Russia, Asia and the Middle East

Pipeline in the Middle East
Developments between Russia, the EU and the US, means the nation is pivoting away from traditional markets and exploring new ground. new ground that lies to the East. For Russian energy, at least in the short term, Asia is its latest playground.
India is quickly emerging as a potential key export market for Russian gas. At stake are huge energy supplies, as BP suggests India’s energy consumption growth is outstripping the world’s major economies. By 2020, India may be using more gas than China.
“India has embarked on the path of becoming a gas-based economy. Russian supplies will help us in meeting price stability and energy security objectives. Our oil & gas PSUs are continuing to explore their participation in more Russian projects.”
Speaking of China, it’s sucking up vast quantities of natural gas and petroleum products. Gazprom will be transmitting $400bn worth of gas along its leviathan-like Power of Siberia pipeline over the next 30 years. China will remain a strategic partner for Russian energy suppliers as the 21st century continues.
Heading to the Middle East, closer collaboration and mutual investment is coming with Russian partners. Throughout the Gulf States, companies are investing heavily in Russian energy projects.
For instance, Abu Dhabi’s Mubadala Petroleum has purchased a 44% stake in Gazpromneft-Vostok, operator of 13 oil fields in the Tomsk and Omsk regions of Western Siberia, in 2018. 
Elsewhere, Russia’s Novatek is eyeing up mutual investment with Saudi firms, according to Russian Energy Minister Alexander Novak said last year.
“We have a number of good projects under discussion, including between Saudi Aramco, Sibur and Novatek,” Novak told Russian 24 state TV network.

Russian reliance on oil & gas equipment imports continues

Infrastructure at oil platform
It’s a fact that in some cases 90% of equipment in use at Russian oil & gas projects is imported. Foreign companies dominate the market, which means the business opportunities will remain high. MIOGE remains the best place to capture those deals.
But what about specifics? It’s estimated that 70% of total Russian domestic equipment demand is sourced from Western companies. Major players such as Schlumberger, Baker Hughes, and Halliburton all hold significant market share. 
According to research from Global Risk Insights, the share of imported solutions in Russia’s oil & gas sector looks like:
• Hard-to-extract reserves – 50%
• LNG – 80%
• Offshore – 80%
The market share for foreign-sourced extraction technology doesn’t sink below 60%:
• Pumps & compressors – 60%
• Equipment for field development – 61%
• Linear & stop valves – 62%
• Catalysts for oil refinery & processing – 74%
• Software & IT services – 91%
Asian firms are ready to challenge Western dominance. Hyundai, for instance, is expanding is Russian presence by building LNG carriers for Arctic projects. Its also exploring more collaboration options with Rosneft.
Chinese companies are already offering oilwell services and technology for majors like Gazprom. China Oilfield Services, Yantai Jereh Oilfield Services Groupand Shaanzi Aipu Machinery are making headway in Russia.
Whatever suppliers’ geography, there is room to expand their sales in Russia.

High investment in oil & gas projects

Arctic Oil Rig
Sanctions are still in place on certain technologies, and it’s true that they have impacted capital expenditure on projects in the last couple of years. However, 2019 is signalling a more bullish attitude from Russia’s supermajors.
Spending is big. Gazprom itself has said its investment and capex budget for the next year is $160bn – and that’s just one company.
Development of Siberian and Far Eastern territories is high on the list of priorities. Rosneft’s exploration and investment in Rosskoye field, estimated at a cool $13.8bn, is amongst the projects to watch in 2019, as well as Gazprom’s continued investment in its Sakhalin LNG plants.
Of course, the Arctic is a major area of interest for Russian firms. Novatek continues to invest in its Yamal LNG plant, alongside partners Total, CNPC and Aramco. 
With big spending plans, Russia remains a key driver of oil & gas equipment demanded, and MIOGE is predicting a healthy 2019.

Russian energy exports will remain high

Russian oil pipeline under construction
Despite pressure from the United States shale gas boom, and the changing face of worldwide energy supplies, the reach of Russian oil & gas is greater than ever before.
2019 is forecast to build on 2018’s exciting export records. For instance, Gazprom saw its European exports increase, up to 53% in some markets. The share of Russian gas in Europe is now as high as 34%.
BP forecasts that Russia will remain the world’s largest exporter of energy resources. This is a long-term prediction. According to BP’s Statistical Energy Review, Russia will remain global top dog until 2040 – and it’s its Asian customers that will be the biggest buyers of oil & gas. 
Oil exports remain to be seen. Russia has made overtures toward committing to OPEC-led production cuts, but given the importance of exports to the nation’s economy, this is something to keep an eye on over the coming months.

An interesting year for Russian energy

Whatever happens throughout 2019, the year promises to be an interesting one. With huge capex, improved gas output, and a pivot towards Asian markets, Russia is sure to generate significant deal opportunities throughout Russia.
MIOGE, the Moscow International Oil & Gas Exhibition, is the place to discover them.

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

Over 560 companies from around the world trust MIOGE to put them in front of, and do business, with representatives from across the oil & gas 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.