the RUSSIA oil & gas competitive intelligence report - Report Buyer

Russia Oil and Gas Competitive Intelligence Report 2010
Russia Upstream Rating -- Overview
Russia has a share of fifth place with Turkey in BMI's updated Upstream Business Environment Ratings,
aided by unrivalled hydrocarbons resources. Its oil and gas reserves account for much of the upstream
score, but licensing, privatisation and country risk factors are less impressive. Medium-term scope exists
for Russia to challenge Bulgaria and Poland above it, although the major Caspian states are likely to
remain out of reach.
Russia Upstream Rating -- Potential Returns
Upstream Market: On the basis of upstream data alone, Russia is the joint second most attractive state in
the CEE region, alongside Turkmenistan. This reflects the highest-placed oil and gas reserves, fifthranked
oil production growth outlook and gas reserves to production ratio (RPR).
Country Structure: Influencing Russia's fourth-highest position in the Limits to Potential Returns
section is its unenviable country structure, which takes last place, behind even Uzbekistan. The state has
greater ownership of upstream assets than elsewhere in the region -- and the industry features relatively
few non-state concerns.
Russia Upstream Rating -- Risks To Potential Returns
Industry Risks: Russia is ranked last, behind even Turkmenistan, in the Risks to Realisation of Potential
Returns section of our ratings. Its last position for Industry Risks is attributable to a poor licensing
environment, and limited near-term privatisation prospects.
Country Risks: Russia's broader country risk environment is unexceptional and ranked 11 th behind
Kazakhstan. The best, and only respectable, score is for long-term policy continuity. Physical
infrastructure barely matches the regional average, while corruption is a key risk for private companies.
Furthermore, their ability to operate is weakened by the country's rule of law.
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