During the 2015-2016 crisis, Russia's largest oil and gas companies never reduced their social investments with some of them actually increasing the investments, including by means of expanding the range of social projects they were financing, the experts write in the new issue of the energy bulletin.
According to experts, this significantly resulted from the financial stability of the companies whose ruble revenue was on the increase as a result of the depreciation of the Russian currency, even as the global oil prices were falling. The relatively modest share of social investments in the company's total expenditure also played a positive role as did the long term nature of the majority of social projects. Oil and gas companies invest primarily in the regions where they have their production assets, with the bulk of social spending going to the development of social infrastructure, education and sports, specify the authors of the report. Thus, in 2016, NOVATEK directed more than half of its social investments at supporting the indigenous peoples of the North, a move that was mostly dictated by the fact that the company has all its major mineral resources extraction projects in the Yamalo-Nenetski autonomous district. Bashneft invests a lot in healthcare and culture after having pledged to implement socially-oriented projects in the Republic of Bashkortostan.
The experts also reviewed the green investments of Russia's major oil companies. The world's largest oil companies have been experimenting with investments in green technologies since the 1970s, but starting from the 2000s they began to gradually move out of renewable energy sources, instead preferring to reinvest their earnings in the core business. Now that a global climate change agreement has been signed and the oil prices have taken a dive, major oil companies are once again taking an interest in alternative technologies, the experts write.
"By investing in green projects, major global energy companies are trying to kill two birds with one stone: on the one hand, this allows them to diversify their business just in case and, on the other, getting involved with green projects lets them better understand the decarbonization processes and become full-fledged participants in determining the policy of their countries in this area," the analysts write. Some of the programs currently being pursued by both major players and smaller oil and gas companies look like little more than PR projects: you are supposed to be green nowadays. Consequently, European companies have been more active than their American counterparts when it comes to investing in renewable energy as well as with regards to making overoptimistic predictions about how the carbon-free era is just around the corner.
A whole separate topic of the bulletin regards supplying energy to isolated territories in Russia and around the world.
For more see the bulletin Supplying Energy to Isolated Territories.
For other issues of the Energy Bulletin, see Publications.