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2015 Russian Oil & Gas Outlook Survey
The companies will feel the impact of the issues caused by the imposed sanctions. However, they could also have a positive effect.
The purpose of this survey is to assess interim performance of the sector and the current performance of individual companies, as well as to share the views of executives on the short-term and long-term prospects for business development.
2014 saw significant economic changes in the country. Due to the sanctions imposed by the OECD against Russia and slumping oil prices (up to USD 45 per barrel), fuel-and-energy companies have encountered new issues. Thus, due to the sanctions a number of joint Arctic shelf development projects have been already blocked or will be blocked in the near future.
In addition, the sanctions have caused difficulties with high-tech equipment supplies necessary for producing tight oil. Western service companies, which are difficult to replace, are abandoning the Russian market.
As a result of these changes, most participants in the survey forecast lower demand for oil and gas in Russia and an increase in the global demand for gas.
Despite a negative trend in the gas and oil demand in Russia, about half of the companies that took part in the survey are planning to keep their asset portfolio unchanged in 2015, while a third of them are going to invest in new core assets. The respondents consider loans and borrowing (44% of the participants) and internally available funds (32%) as their main sources of funding. The need for the latter results from tightened loan conditions due to the sanctions imposed against Russia.
Executive expectations about the level of state regulation in the oil and gas sector continue to grow. Over 70% of the surveyed companies believe that MET differentiation for the production of tight oil reserves is the most conducive tax change for industry development. Just as a year ago, executives are convinced that changing oil product excise rates is also an effective incentive for the development of the oil and gas industry (42% of respondents in favor and 32% against in 2014).