the RUSSIA oil & gas competitive intelligence report - Report Buyer

Russia Oil and Gas Competitive Intelligence Report 2010
Upstream Scores
Kazakhstan and Slovenia are the best and worst performers in this segment, showing that the overall
pecking order is somewhat different from that for combined scores. Azerbaijan is second, itself having a
very useful 14-point lead over Bulgaria. Turkmenistan's hydrocarbons resources mean it has shifted
further from the foot of the table, having caught up with Croatia and Hungary to share eighth place.
Uzbekistan has also mounted a successful challenge for mid-table status. Bulgaria and Poland are tied in
third place, ahead of Turkey and Russia in joint fifth place. Long term, Russia should be able to move
higher, subject to an improved country risk and licensing/regulatory environment. Ukraine has the
potential to challenge Slovakia for 13 th place, and should be able to keep clear of bottom-ranked Slovenia.
Table: Regional Upstream Business Environment Rating
Limits of Potential Returns
Risks to the Realisation of
Potential Returns
Upstream
Market
Country
Structure
Limits
Industry
Risks
Country
Risk
Risks
Upstream
Rating
Rank
Kazakhstan 80 75 79 65 47 59 73 1
Azerbaijan 69 85 73 75 42 63 70 2
Bulgaria 61 50 58 45 64 52 56 3=
Poland 38 80 48 75 72 74 56 3=
Turkey 41 65 47 70 61 67 53 5=
Russia 71 30 61 30 43 35 53 5=
Romania 43 55 46 65 60 63 51 7
Hungary 24 80 38 60 74 65 46 8=
Croatia 29 55 35 70 70 70 46 8=
Turkmenistan 71 45 65 40 30 37 46 8=
Uzbekistan 43 40 42 45 27 39 46 8=
Czech Republic 28 70 38 55 78 63 46 8=
Slovakia 24 70 35 65 74 68 45 13
Ukraine 43 50 44 45 42 44 44 14
Slovenia 28 60 36 40 81 54 41 15
Source: BMI. Scores are out of 100 for all categories, with 100 the highest. The Upstream BE Rating is the principal rating. It
comprises two sub-ratings 'Limits of Potential Returns' and 'Risks to Realisation of Returns', which have a 70% and 30% weighting
respectively. In turn, the 'Limits' Rating comprises Power Sector and Country Structure, which have a 75% and 25% weighting
respectively. They are based upon the oil and gas resource base/growth outlook and sector maturity (Upstream) and the broader
industry competitive environment (Country). The 'Risks' rating comprises Market Risks and Country Risk, which have a 65% and
35% weighting respectively and are based on a subjective evaluation of licensing terms and liberalisation (Market) and the industry's
broader Country Risk exposure (Country), which is based on BMI's proprietary Country Risk Ratings. The ratings structure is aligned
across the 14 Industries for which BMI provides Business Environment Ratings methodology, and is designed to enable clients to
consider each rating individually or as a composite, with the choice depending on their exposure to the industry in each particular
state. For a list of the data/indicators used, please consult the appendix.
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