Rosneft CEO Igor Sechin gave a keynote speech at the opening of the V Eurasian Forum in Verona (Italy) , one of the main platforms for dialogue development in the Eurasian area.
Igor Sechin emphasized that Russia, thanks to its unique geographical location and resource potential, “is naturally intended to be a link, a kind of a "bridge" between Europe and Asia”. According to him, Russian oil today accounts for about 30% of European imports, oil products – 43%. Russia also remains the main supplier of gas to Europe providing over 30% of the demand for this energy source. At the same time, Russia develops the eastern recourses and infrastructure of energy bridge towards Asia. “Today Russian companies are active in the markets of China, India, Japan, Indonesia, Vietnam and many other countries, and Asian investors have already become the main investors in the Russian oil and gas industry” – Igor Sechin said – “Russian oil deliveries to these countries increased 40 times since the year of 2000”.
According to the Head of Rosneft, the active development of relations with the partners in the Asia-Pacific region does not create competition, but rather opens up new opportunities for the European colleagues. “These include new projects, opportunities of swap oil supplies and supplies of equipment, participation in joint production and logistics projects, portfolio investment and bank support”- Igor Sechin noted – “According to our estimates, Rosneft alone can offer projects worth over $100 bln to the European partners in the course of relations development along the energy bridges Russia - Europe and Russia - Asia-Pacific countries”.
In his speech Igor Sechin also presented the outlook for development of the world oil market. “An additional increase in the volume of daily oil consumption will amount at least 15 million barrels in the outlook for 2040”- the Head of Rosneft said – “Let’s abstract from this amount additional shale oil production expected by the experts and optimistically estimated at 6-8 million barrels per day. And add the 5-7% natural production decline at the brownfields – this brings more than 30 million barrels per day. As a result, we can get a demand for additional production capacity of at least 40 million barrels per day. Considering such outlook, the world economy should find opportunities for new oil production, 4 times above the current production of Saudi Arabia to meet the energy needs”.
According to Igor Sechin, in the next year and a half the excess supply period in the market will end and of the normalization process will start. The price of oil will exceed 55 dollars per barrel. However, the low level of investment activity will remain in large and complex projects, since the economies of these projects requires more stable and higher prices.
Europe in the next 15 years, as part of our forecast, will reduce energy consumption by about 5%” - the Head of Rosneft said – “ In Asia, the consumption of energy will increase over the above period by at least 40%. In the presence of Middle East and Russia on the continent being the key oil-producing regions of the world, as well as the Caspian states and the resources of the North Sea, the Eurasia oil is close to the balance of supply and demand. I think in the long term our joint efforts will be able to meet the growing demand for oil in Eurasia as a whole”.
Igor Sechin noted that new projects on the Arctic shelf, in the north of West Siberia as well as development of the energy infrastructure could offset the deficit and ensure the security of energy supplies in Eurasia for decades. “If it is required by the market and appropriate technological and economic conditions develop, Russia will be able in the future to significantly increase oil production which is estimated to amount up to 200 million tons of incremental annual production until 2045” – Igor Sechin Stated. Summarizing, he emphasized that there are objective conditions In Eurasia to reconstruct the continent's economic integrity through the integration of traffic flows, flows of energy, energy resources and technologies.
Rosneft Information Division
October 20, 2016