“The CIS accounts for a fourth of the global natural gas output and exports and 15% of the global oil production and exports. Key indicators of the oil and gas industry are going up but in recent years the growth rate has slowed down. The reason is that the domestic market is getting saturated but exports are not rising because of the lack of export infrastructure and increased competition in the global markets,” said the Analytical Center expert Alexander Amiragyan, speaking at the SAP Forum for the Petrochemical and Oil and Gas sector of the CIS.
According to the expert, the CIS is a key global supplier of energy resources and in the past 15 years the role played by the region has become significantly more important. CIS countries have implemented numerous projects to diversify their sources of oil and gas, which has significantly changed the flows of energy resources in the region as well as their flows into and out of the region. Thus, Turkmenistan switched from exporting most of its NG from Russia to China; Armenia started buying gas from Iran; Russia began selling oil to China through the Eastern Siberia-Pacific Ocean pipeline and natural gas to Turkey through the Blue Stream pipeline, Azerbaijan built an oil and gas pipeline to Turkey via Georgia. Thus, CIS countries have been finding ways to sell oil and gas outside the CIS.
There are some economic and political factors that are holding back further development of the oil and gas industry in exporting Commonwealth states. These include lack of export transport infrastructure (for example to supply gas from Azerbaijan to Southern Europe), difficulties in exploring new deposits (gas in Azerbaijan, oil in Kazakhstan), political risks associated with the implementation of projects (NG pipeline from Turkmenistan to South Asia via Afghanistan).
Ukraine stands apart from the other CIS countries that import energy resources: in the past two years Ukraine has reduced its purchases of the Russian gas more than threefold and is now pursuing a policy of energy conservation while Belarus keeps importing roughly the same amounts of Russian oil and gas and is capitalizing on lower prices. Tajikistan and Kyrgyzstan are experiencing a shortage of oil and gas while their energy prospects are mostly hinged on the development of hydroelectric power. Georgia is transiting oil and gas and has a diversified infrastructure for transporting these resources, while Armenia is completely dependent on supplies of hydrocarbons from Russia and partially from Iran and plans to develop both options in the future.