the RUSSIA oil & gas competitive intelligence report - Report Buyer

Russia Oil and Gas Competitive Intelligence Report 2010
Risk-Reward Ratings
Business Environment Ratings
Central/Eastern Europe Region
The CEE region comprises 15 countries, including the new EU member states, Russia and the four
leading Central Asian hydrocarbons producers. State influence remains very high, and is arguably
increasing in both Russia and Kazakhstan. There has been widespread privatisation progress in the EU
states, but far less movement in the other key states. Kazakhstan's moves to take a bigger share of the
Kashagan project and to modify licensing laws are, we hope, an isolated example, although Russian tax
tweaks, environmental claims and attempted asset re-nationalisation have undermined its already
unattractive licensing and regulatory regime. Oil production growth for the period to 2014 ranges from a
negative 27% for Croatia to a positive 56% in Turkmenistan, while oil demand growth ranges from 6% to
31% across the region. Gas output is forecast to fall by 18% in Romania, but rise 55% in Azerbaijan. The
range for forecast gas consumption growth is from 10% to 81%. The political and economic environment
varies, depending partly on market maturity and EU membership.
Composite Scores
Composite Business Environment scores are calculated using the average of individual Upstream and
Downstream ratings. Kazakhstan and Azerbaijan continue to dominate the top of the regional league
table, taking first and second places with respective scores of 63 and 61 points out of a possible 100.
Slovenia and Uzbekistan now share the final place in the rankings, with a composite upstream and
downstream score of 43 points out of the 100 available. The points spread in the CEE region is
considerably narrower than elsewhere, with the lowest-ranked country having 68% of the score allocated
to the highest-ranked. Russia now shares third place with Poland, but with no immediate chance of
catching the two main Central Asian energy powerhouse states. Turkey, included for the first time, is a
challenger for Poland's position, while Romania and Ukraine are closely matched just above the middle of
the league table, ahead of Hungary and the Czech Republic with limited upstream resource potential.
Slovakia and Croatia are struggling near the foot of the table, but should be able to stay in front of
Slovenia and Uzbekistan.
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