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Stratas Advisors forecasts that East Siberia will ultimately replace West Siberia as the country’s most productive region.
Costs for the development have swelled to about $50 billion as the industry copes with lower commodity prices, prompting concern among analysts about project partners’ capex recovery.
Despite much of the upstream industry’s Arctic ambitions being in deep freeze, Russia has been quietly operating its handful of producing projects with little fuss.
Despite the downturn and sanctions, Russia has grown production but there are signs of fragility in the energy sector, panelists say.
“Russia is increasingly looking east and the various deals made between Rosneft and China are likely to see more Russian crude head to China permanently,” an analyst told Bloomberg.
The company plans to more than double its oil and gas production from overseas fields in four years.
Russia relies on companies including ExxonMobil, BP, Halliburton and Schlumberger for the latest technology and expertise.
The Obama administration’s targets include OAO Rosneft, OAO Novatek, OAO Gazprombank and eight defense firms.
At 20%, BP holds the single biggest foreign investment in Russia.
Investment from energy companies is vital to Ukraine’s mission to pull away from Russian control.
The potential loosening of Russian red tape could provide enough slack for both foreign and domestic oil and gas companies to increase profits and build partnerships.
Sources say PetroChina wants a share of eastern Siberian gas fields.