Russia will continue to boost oil production in the medium term
Александр Новак
World-wide demand for oil will remain at current levels for at least the next 10-15 years, Deputy Prime Minister Alexander Novak said in a column appearing in the Russian publication Energy Policy.

“In the baseline scenario, which assumes maintaining current trends of government policy , technologies and consumer behaviour, by 2040 , fossil fuels will account for more than 70 % of the energy balance,” Novak wrote.
    “And the most realistic forecasts show that volumes of oil consistent with what we see today will be needed throughout the world over the next 10-15 years. And, in general, this horizon of oil consumption goes beyond 2050.
    “According to preliminary forecasts, in 2040, demand for oil in different scenarios will total 74-114 million bpd (compared to 100 million bpd in 2019). The price of gas by 2050, in real terms (meaning in 2019 prices), will stand at $40-$70 per barrrel, depending on the scenario,” he added.
    Based on these forecasts, Russia will continue to boost oil production gradually in the medium- term perspective.
    It can already be said today that the Russian oil industry has managed to pass the peak of declines in production and demand which occurred during the pandemic. The sector managed to maintain investment, thereby also maintaining the possibility of a recovery in production and the further development of the sector without losing market share. The forecast for 2021 oil and gas condensate production is about 522-524 million tonnes, with exports greater than 230 million tonnes, Novak wrote.
    “By April-May 2022, we plan to restore production to pre-pandemic levels. For 2023, output of liquid hydrocarbons is expected to be 540-560 million tonnes and in 2023 542-562 million tonnes. That means we expect to see a trend to increasing oil output,” the deputy prime minister wrote.
    Despite last year’s crisis, oil companies this year increased investment in the sector. 
    “This year, with the combined total of vertically integrated oil companies,  we expect about 1.4 trillion roubles ($19 billion) of investment in the upstream sector, that is 7.6 % more than last year and 5.5 % more than in 2019, before the pandemic,” Novak said.
    Novak said the market is subject to many predictable factors ranging from the pandemic to climate change to geopolitics and macroeconomics. 
   “The difficulty is that all the existing forecasts developing these scenarios can be subject to different variations and therefore their influence on the sector can vary over a very wide range,” Novak wrote.
    “But our basis for proceeding is that oil will remain a guarantee of providing reliable energy, infrastructure and investment factors for the innovative development of our country’s economy and will continue to make up a considerable  share of export production.

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