The efforts to reduce the dependence of Russia's fuel and energy sector on imported technologies and equipment are in full swing

19 june 2018 | Rossiyskaya Gazeta

Despite fostering the import substitution program in the fuel and energy sector, the situation in many areas of the industry can not be clearly and unambiguously defined, writes the Rossiyskaya Gazeta.

Oleg Kolobov
Oleg Kolobov
Department for Fuel and Energy Sector

This situation, according to the newspaper, is affected by diverse starting conditions: the share of foreign equipment in total imports, the development level of domestic competencies or manufacture of comparable equipment, localization opportunities, the long time that it takes to design, develop and commercialize relevant technologies, and financial capability of the companies.

On the whole, the efforts to reduce the dependence of the Russian fuel and energy sector on imported technologies and equipment are in full swing, Oleg Kolobov Analytical Center expert, told the Rossiyskaya Gazeta. According to the Ministry of Industry and Trade (Minpromtorg), whose data were cited by the expert, the dependence of the country's oil and gas industry on foreign technologies and equipment has gone down from 60% in 2014 to 52% in 2017. The target indicator 55% set by Minpromtorg in 2017 was thus exceeded.

The most successful import substitution efforts, as quoted by Oleg Kolobov, include reduced dependence on imported catalysts in oil refining sector. Specifically, the development by Russian oil and gas companies of in-house production made it possible to reduce the share of imported catalysts in oil refinement from 62% in 2014 to 39% in 2016,  according to the Ministry of Energy. In 2016, the oil and gas industry achieved almost 100% import substitution for large diameter pipes. "It should be noted, however, that in the latter case the success came about as a result of investment decisions made long before the import substitution program began to be implemented in the fuel and energy sector in Russia," Mr. Kolobov pointed out.

The expert also reminded that the technology sanctions imposed on Russia aimed to restrict the use of equipment, products and technologies to extract oil from the deep water shelf in the Arctic and shale oil. The restrictions induced western companies specializing in extraction of non-conventional oil reserves to leave Russia. As the foreign partners left the gig, the oil projects were suspended as Russian companies did not have the requisite technologies and experience. Difficulties were immediately encountered with the development of the Bazhenov Formation deposits and the Achimov deposits in Western Siberia, work was suspended on a number of exploration projects aimed to develop deposits on the Black and Kara sea shelves, and the Laptev sea.

However, according to the experts, we should not talk about failure at this point. "The significant dependence on foreign technologies emerged over many years and it's a problem that can not be solved in 2-3 years. Under these conditions, we can only talk about the efforts the results of which we can expect in the medium and long term," he noted. According to the experts, the areas where results can be expected include the production of LNG (the share of imports in 2014, depending on the type of equipment was 50-100%), as well as software for geological exploration, drilling, extraction and processing of hydrocarbons (95-100%). Manufacture of high capacity gas turbines also remains a problem.

Source: The Rossiyskaya Gazeta