Russia to expand energy supplies to Asia

Russia’s energy system has maintained its stability in spite of sanctions imposed on the country and the move away from Russian energy by European states. The next stage will be to expand energy supplies to Asian nations and attain complete sovereignty in the sector, said President of Russia Vladimir Putin at the plenary session of Russian Energy Week (REW).

KEY CONCLUSIONS

Russia has successfully set up its energy system following the imposition of sanctions

“As you may be aware, European countries have effectively turned down our energy. Not yet entirely, but they have been trying to. For many years, these resources have played a significant role in ensuring the economic and social prosperity of the European Union. Perhaps, not entirely, but our energy accounted for much of their well-being. Recent restrictive measures have been imposed on banking services, freight and insurance, and price caps have been established on our oil and gas. <...> They [EU countries – ed.] are now paying more for oil, refined products and natural gas. As a result, the EU’s economy is hovering near the zero-growth mark, and industrial production has been in the negative since March. <...> Industrial output dynamics in the EU for July showed a decline of 2.4%. Energy output dropped by 4.7%, and for the first half of this year there was a 5% drop. These developments have impacted household incomes. <...> Notably, the Russian fuel and energy complex is operating steadily. Production and financial indicators are strong. Thanks to corporate and public efforts, the tanker fleet has expanded, and new payment, insurance and reinsurance mechanisms for our cargo have been put in place,” Vladimir Putin, President of the Russian Federation.

“[Following the remarks made by President of the Russian Federation Vladimir Putin – ed.] I thought that the impact of Western sanctions on Russia is not as bad as it may seem. This situation has allowed your country to adapt to these negative effects, overcome them, and most importantly, find alternative energy markets. Most importantly, I believe, these effects have made it possible for the countries that are interested in cooperating with Russia to reach out independently and free from external dictate,” Amro Abdelhamid, Presenter, Al Ghad pan-Arab television network.

“I listened to what the President [Vladimir Putin – ed.] had to say, and I would like to emphasize that he is a wise leader and responds very accurately to the emerging challenges which are leading to new opportunities for development,” Muhammed Shia Al-Sudani, Prime Minister of Iraq.

PROBLEMS

Threats to the global energy system resulting from the actions of certain countries

“We fulfil all our obligations, inside the country and to our partners who wish to work with us. Those who have imposed these restrictions are facing difficulties they cannot overcome so far. So, they no longer buy our natural gas. As a result, prices have skyrocketed. <...> The Nord Stream pipelines were blown up, but nobody investigates the incident. I am surprised about the position of many European countries. It was obviously an act of international terrorism and, from all appearances, committed at a state level. That’s because no random group of people who somehow decided to blow up gas pipelines would have been able to commit such an act without state support,” Vladimir Putin, President of the Russian Federation.

“Discontent is growing on the Arab street – there will be increasing pressure on Arab governments to take a clear stand [on the clash between Palestinian groups and Israeli troops in the Gaza Strip – ed.]. The spread of the crisis and conflict throughout the region is definitely a destabilizing factor. <...> There is a risk that energy supplies will be stopped. The region that supplies resources to energy markets is very sensitive and very important,” Muhammed Shia Al-Sudani, Prime Minister of Iraq.

SOLUTIONS

Boosting international cooperation on energy with reliable countries

“We have chosen convergence to address challenges, and are interested in diversifying energy sources in order to expand economic cooperation and strengthen security. <...> We are striving for economic integration to enhance prosperity and cooperation. Building on that vision, we have adopted an unparalleled project, the Development Path project, and begun implementing it. The project has a number of economic objectives which will have a positive impact in the medium and long term. We confirm our readiness for serious work with the countries of the region and the world to implement the project within the framework of our philosophy on attracting investors and capital in order to turn our region into a platform for converging interests. <...> And we thank the leadership of the Russian Federation for the invitation to take part in this forum. We view it as a major opportunity for opening new doors of possibilities, for developing cooperation,” Muhammed Shia Al-Sudani, Prime Minister of Iraq.

“Some actions by our colleagues, particularly the Western elite, have, of course, wreaked havoc on the global energy market, including the oil market. The negative consequences of such politicized moves affect the entire global economy. Now, we have to redress the balance, and it falls upon responsible market participants to do so. To ensure stability in the oil market, major suppliers must act in concert on open and transparent terms. This is how Russia is working with its partners within OPEC+. We primarily rely on the objective market-driven dynamics of oil supply and demand, and the industry’s investment programmes. This is why the OPEC+ countries fully act on their commitments and are effectively addressing all challenges,” Vladimir Putin, President of the Russian Federation.

Shifting the focus of energy supplies to Asian markets

According to experts, natural gas demand will soar in all regions, except North America and Europe, until 2050. The share of Europe in global demand will more than halve to 5%. Incidentally, the share of Asia will increase by 50%, from 21% to 30%. Russia continues to export more gas to the People’s Republic of China. In 2025, the Power of Siberia gas pipeline will reach its design capacity of 38 billion cubic metres of gas annually. However, it already transports substantial gas volumes exceeding contract obligations,” Vladimir Putin, President of the Russian Federation.

Attaining sovereignty in the energy sector

“Russian fuel and energy projects are increasingly based on domestic technology, equipment, machinery and software. <...> This is about achieving complete sovereignty within the industry, including technological, personnel and financial sovereignty. We will need to drastically increase the volume and share of Russian-made equipment, especially critical equipment, to raise the training of qualified personnel to a new level and, of course, to form our own mechanisms for financing investment projects. Notably, we are continuously working to create and introduce domestic machinery and equipment for the oil and gas sector and power transmission. Since 2014, we have been successfully producing over 140 types of equipment, including drilling and hydrocarbon production equipment, heat-transfer equipment, catalysts and agents, high-voltage cables and switches, and much more,” Vladimir Putin, President of the Russian Federation.

For more information, visit the Roscongress Foundation’s Information and Analytical System at roscongress.org/en.

The Russian Energy Week International Forum is a key global platform for discussing current trends in the development of the modern fuel and energy sector. This event is traditionally held at the highest level, featuring the participation of leaders from the largest companies in the energy industry. In 2022, more than 70 events, with the involvement of over 270 speakers, were held as part of REW. The Forum attracted over 3,000 participants and media representatives from Russia, as well as 83 foreign countries and territories. The Forum is organized by the Roscongress Foundation and the Ministry of Energy of the Russian Federation, with the support of the Moscow City Government.

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