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12 Dec, 2006 12:27

Russia to conquer Asian oil and gas markets

Russia to conquer Asian oil and gas markets

Russia is turning its attention to the new oil and gas markets of the Asia – Pacific region. But the country faces many challenges in its drive to become the main supplier of energy to Asia.

The Asian oil and gas market is the world's fastest growing and, already, the largest in terms of consumption. In the past couple of years, Russian companies have begun expanding ties with China, Japan and the Republic of Korea. This offers Russia new export routes which could boost its slowing output.

The International Energy Agency suggests that Russia must provide investments into infrastructure and marketing to bring production growth back to 2003 levels. “We need to see the investment climate such that companies are comfortable making investments, that they could look forward twenty years, twenty five years and anticipate a return on their investments,” stated William Ramsay, Deputy Executive Director for IEA.

The Russian government admits the slowdown in production and says that oil companies must not just exploit old fields, but invest in new exploration and new projects. “All the necessary conditions are being created so that Russian companies can produce, transport and sell their products on the Eastern markets,” claims Anatoly Yanovsky of Russia’s Industry and Energy Ministry.

To compete with and market to the Asian region, Russia will focus on oil and gas fields in East Siberia and the Far East. The East-Siberia - Pacific Ocean pipeline, which is currently being built, will serve as the backbone for Russian oil strategy in the Far East. So long as output can satisfy the new pipeline, Russia's gas industry could co-exist with Asian rivals while profiting from the growing energy needs of Asian partners.