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Russia should regain its share on the global oil market once demand returns to normal, and it can do that and even increase its market share after the drop-off in global oil investment due to the pandemic this year, Russia’s Energy Minister Alexander Novak wrote in the ministry’s Russian-language magazine Energy Policy.
“It will be extremely important for Russia, and for other oil producers, to regain their market share as soon as possible, and even increase it, when demand returns to pre-crisis levels,” Novak said.
According to the Russian minister, global oil supply could be lower in the period 2023-2025 due to the insufficient investment in oil production this year because of the pandemic and the crash in oil prices.
This year, global investment in oil and gas production are expected to be US$170 billion lower than the 2019 level, and investment is unlikely to fully recover in 2021, Novak said.
It could be due to this decline in investment and reduced competition among oil-producing countries that Russia may be able to increase its market share, the minister wrote.
Russia’s potential for boosting its production in the future depends on the support for its oilfield services sector in the present, Novak noted.
Russia is working on a program to have wells drilled now and left uncompleted until 2022, when the current OPEC+ deal expires, the minister said.
The program was first proposed in May this year when Russia’s government approved a plan to have new oil wells drilled this year and next for 2022 production. A Russian government commission backs the proposals of the energy and finance ministries to create a ‘fund of uncompleted wells’ with the oil firms with the purpose of supporting the oilfield services sector, the Russian government said in May.
According to Reuters sources, the plan has hit a snag recently after the finance ministry has been reluctant to allocate funds to the ‘uncompleted wells’ program.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.