Investment in Russian energy industry to rise 15% in 2016

MOSCOW, Jul 25 (PRIME) -- Investment in the Russian energy industry may increase by 15% on the year to about 3.6 trillion rubles in 2016, Energy Minister Alexander Novak told President Vladimir Putin on Monday.

“Despite low oil prices, despite problems with external funding, investment in the fuel and energy complex is likely to total about 3.6 trillion rubles this year. So this is a rise of almost 15% against the last year’s level of 3.1 trillion rubles,” Novak said.

“We see an increase in both oil and gas industries, because in the gas sector, as you know, a rise in investment was caused at least by Yamal LNG in 2016, although investments exceeded 400 billion rubles in 2015. And it will be even more this year.”

The Yamal LNG project envisages construction of a 16.5-million-tonne liquefied natural gas (LNG) plant on the basis of the Yuzhno-Tambeiskoye field on the Yamal Peninsula in the north of Russia.

Investments in the coal industry and in production of electric power are also rising on the year, Novak said.

“It means that companies are still investing on the back of such conditions, raising funding. I can say that almost 6,500-megawatt (MW) worth of facilities will be launched this year. In the first half year, 1,400 MW were launched, it is in the Chelyabinsk Region,” Novak said.

COMPETITIVE DESPITE LOW PRICES

Russian companies are still competitive on the global market, the minister said.

“I would like to stress once more that our fuel and energy companies successfully cope with the fiercest competition and are competing on global markets now,” he said.

Russia sent 51% of its coal to the east to such countries as Japan, South Korea, India and Vietnam.

“This direction is developing, port infrastructure is developing, and exports are rising, in principle, in spite of difficulties with prices, while we have quite low prices not only for oil and gas, but also for coal nowadays,” the minister said.

Russia will not depend on foreign oil production technologies by 2019, Novak also said.

“Today Gazprom Neft conducted a trial testing of Russian samples, which were developed by Russian firms, St. Petersburg’s scientific companies, at the Vyngapurovskoye deposit,” he said.

“And after this trial testing we will establish industrial production by 2019, and we will not totally depend on imported technologies.”

He added that import substitution will also cover software and telecommunications equipment.

Putin said, “We see development, good development almost in all fields. We should not lose sight of all these issues, which were considered by us now.”

“We must seek not extensive, but intensive development of the industry, we must modernize, shift to modern equipment, modern methods to manage the industry.”

(64.6270 rubles – U.S. $1)

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