Oil and Gas Sector Needs State Stimulation

14 october 2015

The expert of Analytical Center Irina Pominova spoke at the XII International Forum "Services and equipment for the oil and gas industry in Russia" with the report "The key problems of the Russian oil and gas services in the new reality."

"Financial and technological sanctions imposed on Russia by a number of Western countries and the decline in world oil prices form new economic realities for the oil and gas sector. They have exacerbated existing problems, which can be grouped as follows: sectoral organization with a dominant position of the customer (mining companies), weakness of coordination of state policy and need for development and innovation." The industry faces a new ambitious challenge - import substitution.

According to the expert, the solutions for mentioned issues mainly will depend on the way of the further development of the sector, so as on timely measures of state support and stimulation. The latter has a high short-term priority, since new reality puts the companies into a highly vulnerable state. In a more long-term perspective solutions of some of these problems 'in a natural way' are possible. «The reservation of a status-quo is deemed the least possible, and the realization of two other ways – the way of the “reverse” integration into a Vertically Integrated Oil Company, separate elements of which we yet started to observe, and the “Rosneft” company is the brightest example of it, and the way of consolidation, as with coordination role of the state structure (which was actively discussed), so evolutional (under the influence of market forces), will lead to merging and will increase stability of domestic companies,” said Ms. Pominova.