Alexander Novak, replaced this week as Russia's energy minister, has laid out a programme of targets designed to sustain the oil and gas-producing giant's position of industry dominance over the next 15 years.
Speaking to parliamentarians in the lower house of the Russian parliament — the Duma — this week, Novak said his two main goals in the new post of deputy prime minister will be to ensure the growth of oil and gas supplies to the domestic market and availability of pipeline gas to maintain the country’s energy security.
Oil, gas and LNG
Novak also aims to maintain levels of Russian energy exports to the global market.
He said that authorities will continue to support efforts of state-controlled oil producers Rosneft and Gazprom Neft to explore and develop remote onshore and offshore greenfields in the the country’s Arctic region.
Unconventional projects, primarily in commercialising the oil potential of the vast Bazhenov formations in West Siberia, will not be ignored, he added.
Novak also reiterated high expectations from the Kremlin of Russia's liquefied natural gas exports potential.
The country aims to take 20% of the global LNG market by 2035, with expected annual deliveries of between 120 million and 140 million tonnes of LNG from projects in West and East Siberia and the country's far east, Novak said.
Russia also intends to increase the processing of oil and gas into chemicals and polymers that can be exported to international markets as the response to a threat of potential decline in demand for carbon fuels, he added.
Opec+ commitments intact
Meanwhile, Russia has no plans to curtail its co-operation with Opec and other large oil producing nations and will support their efforts to keep the balance between global demand and supply, Novak said.
Finally, authorities are planning to work out measures to support projects to produce hydrogen, as this fuel has the potential to become a “leading player” in the global energy market.
However, Novak said nothing about his planned response to current challenges that Russian oil producers face following the cancellation of major tax concessions, and continued selective support from the government to industry giants such as Rosneft, Gazprom and Novatek.
Will Novak be disconnected from oil and gas?
According to a partner in Moscow-based consultancy Rusenergy, Mikhail Krutikhin, despite Novak’s promotion this week by President Vladimir Putin, his new position does not entail the “creation of legitimate and formal instruments for influencing volumes of oil and gas production, consumption and exports”.
Krutikhin claimed: “The disconnect between him and the oil and gas industry will grow."
He added that among all the goals, Novak will first be charged with reporting back to Putin on Russia's co-operation with Opec+ alliance, with the interests of the country’s oil and gas producers being neglected.
An unidentified Opec official told Russian state news agency Tass that the cartel hopes to continue seeing Novak as a chief negotiator from Russia.
“He has established himself as a responsible and reliable partner,” the official was quoted as saying.