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  • 2023 February 13 15:59

    Over 80% of Russia’s oil exports and 75% of petroleum products to go to friendly countries - Alexander Novak

    In 2022, Russia’s oil exports rose by 7.6%, LNG – by 7.9%

    Russia continues searching new sales markets for oil and petroleum products. Over 80% of oil exports and 75% of petroleum products is planned to be sent to friendly countries in 2023, according to the article by Alexander Novak, Deputy Prime Minister of the Russian Federation,  "Russian Fuel and Energy Complex 2022: Challenges, Results and Prospects" published in the Energy Policy magazine.

    According to the article, the Russian fuel and energy complex (FEC) faced a number of "unprecedented external challenges" in 2022, but "despite the pessimistic forecasts, the Russian energy industry is coping with the restrictions successfully." In 2022, oil production in Russia totaled 535.2 million tonnes, up 2%, year-on-year. Exports rose by 7.6% to 242 million tonnes. 38 hydrocarbon fields with the total recoverable oil reserves of 96.4 million tonnes were discovered in 2022.

    When referring to the embargo on transportation of oil and petroleum products imposed by the Europe, the Deputy Prime Minister said: “All this has already led to volatility in the global oil markets and adverse economic consequences for the countries that had initiated the restrictions.”

    In order to redirect the flow of Russian oil and petroleum products to friendly countries, a project to increase transportation to the port of Kozmino was implemented in 2022. In the result, annual transportation to the APR countries increased to 42 million tonnes. While the peak production registered in March-April last year was down by about 1.2 million barrels per day, the middle of the year saw the recovery of production to the level of January-February - about 10 million barrels per day.

    In 2022, gas production in Russia totaled 673.8 billion cubic meters, exports fell by 25.1% to 184.4 billion cubic meters. However, gas supplies to China were growing throughout the year.

    “We give special importance to the development of LNG production. LNG exports rose by 7.9% and reached 45.7 billion cubic meters last year. The world gas market is becoming as global as possible, so the demand for liquefied gas will grow in the future due to its mobility,” the Deputy Prime Minister believes.

    According to him, the economic performance of Russian LNG production projects “are among the most competitive worldwide due to the low cost of production and low costs of logistics operations in the Asia-Pacific Region,” therefore, “implementation of all the planned LNG projects remains a priority task."

    Alexander Novak emphasizes that the Government is working on the technological development of the industry, first of all, on the creation of domestic gas liquefaction facilities. RUB 1 billion have been allocated for these purposes. “The launching and partial financing of 4 projects on creation of LNG equipment for mid- and large-scale production will be ensured. A  total of 18 projects are planned for implementation in Russia. Russian LNG complex Arctic Cascade is already in operation at the Yamal LNG plant. Essential focus is on the development of the Northern Sea Route with LNG accounting for the bulk of its cargo flow,” reads the article.

    In 2022, coal production in Russia totaled 443.6 million tonnes which is slightly more than in the previous year. Over the year, exports decreased by 7.5% (210.9 million tonnes). The Deputy Prime Minister notes that the efforts of the state and coal companies are aimed at further shift of Russian coal exports to the APR countries, as well as at boosting the growth of demand for coal in the domestic market. Modernization of the Eastern Polygon of railways is planned for that purpose (Phase 2). It is to result in the increase the BAM and the Transsib export capacity to 180 million tonnes per year. Underway is the construction of the Elga-Chumikan railway line, which is to ensure an increase in annual coal shipments to 10 million tonnes in 2025 and up to 30 million tonnes in 2030. The development of the Elginsky coal complex will result in the production increase up to 50 million tonnes.

    The Deputy Prime Minister refers to China and India as Russia’s main foreign economic partners: those states continue to build up imports of Russian coal. Over the past year, Russia exported 59.52 million tonnes of coal to China (+11.2% vs 2021), and 16.7 million tonnes to India (+147.8% vs 2021). “We expect coal exports to the countries of the Asia-Pacific region to rise 1.5-2 times by 2030,” writes Alexander Novak.

    He also reminds about a roadmap for the development of the high-tech segment, “Hydrogen Energy Development” approved in the end of 2022. In January of 2023, an agreement on implementation of the roadmap was signed between the Russian Government, Rosatom and Gazprom. Allocation of RUB 9.3 billion from the federal budget is foreseen for the period up to 2024 as part of the federal project “Clean Energy”.

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