Despite stereotypes about dependence on hydrocarbons, Kremlin says Russia is gradually reducing economic reliance on oil & gas

2 Sep, 2020 19:15

By Jonny Tickle

Nobody in Russia is happy about the dependence on oil and gas, but it is gradually decreasing, according to Kremlin spokesman Dmitry Peskov. In the past decade, Russia has moved away from hydrocarbons and into other sectors.

On Tuesday, when speaking on a broadcast marking students’ return to school, President Vladimir Putin noted that Russia is a nation with advanced technology, rejecting the idea that it is a resource appendage. In 2014, US Senator John McCain famously mocked Russia as a “gas station masquerading as a country.” According to Putin and Peskov, this assessment is becoming less and less true.

When asked if the Kremlin is satisfied with 40 percent of the country’s revenues coming from oil and gas, Peskov told Russian radio station Kommersant FM the government is working to reduce that figure.

“Of course, nobody is satisfied with this figure,” he said. “This number is being slowly reduced. And, over the past 10 to 15 years, this reduction can be seen clearly.”

The spokesman was also careful to point out that the oil and gas sector does not only include primary energy resources, but also refined products that are obtained using high-tech processes in “ultra-modern plants” throughout the country.

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Russia has long been seeking ways to move away from dependency on oil and gas. Earlier this summer, the Ministry of Energy announced that industry giants Gazprom and Rosatom are planning a pivot towards clean hydrogen. With the international trend towards green power being seen as a significant threat to the Russian economy, the government intends to make exports of the world’s most abundant gas a large part of its energy sector.

Outside of energy, Russia has an ever-growing high-tech sector, and is the world’s top grain exporter. It is also the world’s most prolific producer of diamonds.

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Last year, Russia’s Ministry of Finance announced that the share of oil and gas revenues would continue to decline, but would still account for more than a third of revenues in 2022, at 35 percent.

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