Russia - the rising energy superpower

business-times.asia1.com.sg :

Shell Oil has had its environmental permit to operate the Sakhalin 2 project withdrawn and ExxonMobil has been told that its De Kastri oil terminal (Sakhalin 1) fails to meet environmental regulations. Total and BP have also come under pressure. Several governments have protested Russia's actions. They warn that Western investors will withhold investment and expertise which the Russians must have to develop their reserves. What they find hard to understand is that when it comes to energy, Russia today is very different from the Russia of the 1990s.

Despite Mr Putin's insistence that Russia is not an energy superpower, it is. It produces more crude oil today than Saudi Arabia, and its petroleum exports last year brought it a cash windfall of more than US$100 billion. With so much income at its disposal, there is growing sentiment in Russia that it has no need not only for those PSAs (Production Sharing Agreements), but for Western capital investment. As for Western technical expertise, the Russians have discovered they can easily buy that from service companies.

High oil prices, the recovery of its oil production and a new sense that there is little pressure or restraint the West can bring to bear have generated a new self-confidence among Russian officials. Short of new technological breakthroughs, new energy discoveries and serious energy conservation, Russia will continue to find itself in a commanding position.

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