the RUSSIA oil & gas competitive intelligence report - Report Buyer

Russia Oil and Gas Competitive Intelligence Report 2010
Competitive Landscape Analysis
• The Russian gas industry is dominated by Gazprom, which is effectively a downstream gas
monopoly that also accounts for around 84% of upstream production. In 2009, Gazprom
produced 462bcm, the lowest level in history. Gazprom’s oil arm Gazprom Neft is now a major
producer, following the acquisition of Yukos’ assets in 2007-2009.
• The oil sector is more diversified. State-run Rosneft is the main producer, but privately owned
Surgutneftegaz, Lukoil, TNK-BP and large regional producers such as Tatneft and Bashneft, are
not too far behind. The degree of private companies’ connections with the Kremlin varies, but
overall inter-company competition is more limited than it would initially appear.
• The Russian government has moved forward its plans to privatise a larger share of Rosneft. On
July 26, the Finance Ministry included the country's largest oil producer in the list of nine
companies earmarked for partial privatisation in 2011-2013. Up to 24.16% of Rosneft could be
sold, leaving the state with the 51% controlling stake.
• Many leading domestic independents, such as Russneft and Urals Energy, have been fashioned
by high-profile businessmen in the wake of the state asset sell-off in the 1990s. They are now,
however, threatened by takeovers from the state-run majors owing to debt over-exposure, often
in non-oil-related activities. Sibir Energy, one of the largest independent producers, was taken
over by Gazprom Neft in mid-2009.
• BP has shares in the TNK-BP venture, which is the main IOC interest. BP is boosting its Russian
focus following the Macondo spill. ExxonMobil, Royal Dutch Shell and BP are members of
consortia developing the Sakhalin fields.
• Lukoil’s oil output in January-September 20009 totalled around 1.83mn b/d. The group has an
estimated 18% share of refining capacity and 1,815 service stations in Russia.
• US major ConocoPhillips is selling its entire 20%Lukoil stake. The decision fits ConocoPhillips'
stated asset divestment plan, first announced in October 2009, after the company's investment in
Lukoil failed to meet expectations. The company first denied any Lukoil divestment and then
said only 10% will be sold.
• Surgutneftegaz’s 2008 crude production was 1.24mn b/d, while gas output totalled 14.1bcm.
Downstream assets include the 400,000b/d Kirishi oil refinery and around 300 service stations in
north-western Russia.
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