The Oil and Gas Market In Russia

Topics: Petroleum, Natural gas, Russia Pages: 71 (16646 words) Published: October 2, 2014


The Oil and Gas Market In Russia
Research Project
Bodin Bulatovic, Jana Filyushina, Maria Loymoeva, Elizaveta Shakhanova, Alexander Steffen, Bogomila Traykova, Nikolay Varbitzaliev, Ksenia Volkova, Maria Zhigulina Annotation
This Project was assembled by WU and GSOM students during the joint International Summer University 2013

Table of Contents
Introduction3
I.Prоblеm Dеfinitiоn5
II.Rеsеаrch Quеstiоns in this Paper6
III.Аims аnd Objеctivеs of this Paper6
Thе Russiаn Оil аnd Gаs Mаrkеt7
I.Thе Russiаn Оil Mаrkеt8
a.Gеоgrаphicаl Distributiоn of Russian Oil8
b.Trаnspоrtаtiоn of Russian Oil9
c.Еxpоrt of Russian Oil11
II.Thе Russiаn Gаs Mаrkеt12
a.Geographical Distribution of Russian Gas12
b.Geographic Difficulties of Gas Exploration in Russia13
c.Russian Gas Prices14
d.Transportation of Russian Gas15
e.Export of Russian Gas16
f.Russia’s Principal Gas Producing Companies17
IV.Foreign Competition in the Industry18
The Political Importance of Oil &Gas in Russia21
I.Privаtizаtiоn in thе Pоst-Sоviеt Еrа21
II.A New Political Course23
The Economical Importance of Oil & Gas in Russia25
Supply Chаin Risks & Оppоrtunitiеs in the Russian Оil аnd Gаs Industry28 I.Supply Chain Management Defined28
II.Supply Chain Management in the Oil and Gas Industry29
a.The Complexity of the Supply Chain29
b.Inflexibility of the Supply Chain31
c.Vertically Integrated Supply Chain32
III.SCM Issuеs: Transneft” and “Russian Railways34
IV.SCM Initiаtivеs37
a.Use of Oil in Transportation37
b.Growing Supply and Related Uncertainty38
c.Matching Opportunities and Risks with Sources of Funds39 Case Study: Lukоil40
I.Intrоductiоn40
II.Cоmpаny оvеrviеw41
III.Lukоil Shаrеhоldеr Structurе44
IV.Upstrеаm45
V.Dоwnstrеаm51
VI.Rеtаil Nеtwоrk53
VII.Trаding55
VIII.Innоvаtiоn55
IX.Supply оf Оil аnd Gаs57
X.Prоductiоn аnd Supply Structurе оf LUKОIL59
XI.Trаnspоrt60
XII.Cоnclusiоn аnd Prеdictiоns61
Conclusion64

Introduction
Hydrocarbons derived from petroleum oil, natural gas or coal are essential in many ways to modern life and its quality. The bulk of the world’s hydrocarbons are used as fuels for propulsion, electrical power generation and heating. The chemical, petro-chemical, plastic and rubber industries also depend upon hydrocarbons as raw materials for their products. Indeed, most industrially significant synthetic chemicals are derived from petroleum sources. An ever increasing world population and energy consumption, compared with our finite non-renewable fossil fuel resources, which will be increasingly depleted, are clearly now on a collision course. New solutions are needed in order for human population to sustain the standard of living to which the industrialized world has become accustomed and which the developing world is striving to achieve (Economist, 2013 (a)).. Satisfying our society’s needs, while safeguarding the environment and allowing future generations to enjoy planet Earth as we do today is one of the greatest challenges that humans face nowadays. The world is currently consuming about 85 million barrels of oil a day, and about two-thirds as much natural gas equivalent, both derived from non-renewable natural sources (Index Mundi, 2013). It is fortunate that we still have significant worldwide reserves left, including heavy oils, oil shale, etc. With a world population estimated at 7.12 billion and still growing, the demand for oil and gas will increase. This, of course, raises the questions of whether the resources will soon be depleted and what alternatives human population has. I. Prоblеm Dеfinitiоn

The global oil industry has entered an era of extremely scarce resources. According to a large majority of the industry’s research, there are only enough crude resources left to sustain current consumption levels for approximately 50 more years (Economist, 2013 (b)). Balance of supply...

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