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Main page > Conferences > Russia and India&China Prospects of Energy Cooperation
Russia and India&China Prospects of Energy Cooperation
Key topics of Konstantin Simonov's speech at The International conference “Asia-Pacific Security Challenges: Implications for Europe and the Atlantic Alliance”
Prague, Czech Republic, September 9, 2008.
(Read this speech's presentation in PDF 
150 KB)
China and India: Much in Common
- Traditional stake on coal: 56% in energy generation of India, 65% in energy generation in China
- Lack of Oil and Gas Reserves
- Forecast of economic growth is 8-12%
- Diagnostic: hydrocarbon starvation
Source: EIA
First Problem will be Oil
- Serious gap between oil production and consumption: 90 mln tons in India and 180 mln tons in China
Source: BP
Second Problem will be Gas
Source: BP
- Gas production in India in 2006 was 30,4 bcm, consumption - 36,6 bcm
- The serious increasing of consumption: the production of gas will be behind consumption very soon
- International Energy Agency: China import of gas in 2020 will be 80-160 bcm
- Forecast of gas consumption in India : 2010 - 75,6 bcm, 2012 - 114 bcm, 2030 - 243 bcm. Forecast of production in 2030 is less then 40 bcm
Source: BP
Crusade for Oil and Gas
- At the end of 2006 India invested more them $5,5 bln to foreign upstream ($2,8 bln in Russia). Projects in 14 countries
- But energy expansion has serious limitation
- Europe and United States will be competitors of IC in Arabian Gulf, Central Asia and Africa
China and India in Energy Trap
| 10 Main Countries on Proved Reserves of Oil (2007) | 10 Main Countries on Proved Reserves of Gas (2007) | ||
|---|---|---|---|
| Saudi Arabia | 21,3% | Russia | 25,2% |
| Iran | 11,2% | Iran | 15,7% |
| Iraq | 9,3% | Quatar | 14,4% |
| Kuwait | 8,2% | Saudi Arabia | 4,0% |
| UAE | 7,9% | USA | 3,4% |
| Venezuela | 7,0% | UAE | 3,4% |
| Russia | 6,4% | Nigeria | 3,0% |
| Libya | 3,3% | Venezuela | 2,9% |
| Kazakhstan | 3,2% | Algeria | 2,5% |
| Nigeria | 2,9% | Iraq | 1,8% |
- Oil: more diffused raw material but the problem of transportation (Strait of Hormuz)
- Gas: three countries control 55% of proved reserves
Diversification of Ånergy Supply – Impermissible Profusion
- Sutuation with gas is the most dramatic
- LNG: the beginning of supply from Australia, Algeria, Nigeria, Oman, Malaysia and Indonesia. But the stake on LNG can be problematic. This market is very competitive
- Australia, Malaysia, Indonesia, Burma – local solutions (no serious reserves, no possibilities of significant increasing of production)
- Central Asia: “word of honour reserves”
- Turkmenistan: Production of gas in 2007 was 67,4 bcm ( 2,7%)
- “Word of honour”: 250 bcm in 2015 ( 370%!!!)
Two Gas Alternative
- Real alternative: Russia or Iran
- Iran: two Problems. Political Future and Transportation Routes. Pipeline form Iran to India through Pakistan. More than 2000 km of political instability
- Russia: the problem of Choice between European and Asian Markets
- January-August, 2008: oil production 0,6% gas production 3,1%
- Special thanks from China and India to the theorists of “energy weapon” and “diversification of energy supply to Europe”
Thank you!
Special report:
Liquefied Natural Gas Outlook: Expectations and Reality
World market has shown interest to liquefied gas. Russia has so far been aside of it. However, producers have announced several large LNG projects. The new study will help investigate this delicate subject and understand what is in store for LNG production and export in the nearest years.Analytical series “The Fuel and Energy Complex of Russia”:
State regulation in the oil and gas sector in 2011 and prospects for 2012
The year 2011 turned out to be rather contradictory for the oil and gas industry. On one side, preliminary results of basic parameters seem quite satisfactory. On the other side, the depletion of oil production growth potential is becoming more obvious. Prime Minister Vladimir Putin several times mentioned that the oil industry reached its peak. This was described as an ordinary event, although in reality it reflects recognition of strategic mistakes once made.The Present and Future of Gazprom
Gazprom’s 2010-2011 financial results were phenomenal. An employment contract of Gazprom CEO Alexey Miller, who has been managing the gas giant for 10 years, was prolonged ahead of time for another five years. However, the country’s main company found itself under powerful pressure both on the domestic and external markets.State management in the oil and gas sector: Last autumn of current political cycle
The main political intrigue of the upcoming election cycle would seem to be over. Vladimir Putin is set to return to the president’s office, while Dmitry Medvedev is to chair the Cabinet. But in reality, everything is just about to begin. Some scenarios of reformatting Russian state authorities are indeed ruled out. Yet, there are many unclear things, including the question of the oil and gas sector management. Changes in the system are unavoidable. There is temptation to fix the rules of the game for the next six years, which adds a special connotation to the upcoming transformation.Central Asia and Caspian Region: Problems of Development and Transportation of Hydrocarbons
Despite problems related to signing contracts on purchasing gas from the Caspian region countries, the European Commission is fully determined to implement Southern Corridor projects to reduce dependence on Russia. In its turn, Moscow keeps steadily promoting its alternative South Stream project. But the price of the question puts both sides into a difficult position.Export Strategy of Russia’s Oil and Gas Sector
In 2010 the Russian oil industry set an absolute record in terms of production. An oil pipeline to China has been launched this year expanding our potential of oil supplies to Asia. Diversification of export routes seemed to be quite a reasonable strategy on the background of growing production. However, there are certain factors that should be taken into account.Rearrangement of Property in the Oil and Gas Sector
Preparations for the elections are accompanied by quite serious changes in the structure of property of oil and gas companies. Liberal experts have formed a firm opinion that the state presence in the sector is growing. In reality there is an opposite process. The matter is that new owners of assets are loyal people.New Legal and Fiscal Procedures in the Oil and Gas Industry
There are rather contradictory developments in the Russian oil and gas industry. However, this is not surprising: the role this sector is to play in the current and most importantly in the future structure of the Russian economy has not been finally defined yet. Besides, there are active preparations for the introduction of changes in the legislative framework of the Russian oil and gas sector. A new bill on oil is to be soon submitted to the State Duma; the document is to become almost a new oil constitution.Prospects of Third Legislative Package Implementation, Future of European Gas Market
The European Union remains Russia’s key gas market. Therefore, in Russia they take a close interest in any changes therein. The new EU legislation, as contemplated by its authors, is intended to destroy vertically integrated monopolies in the transport and storage of gas. Gas suppliers with Russia at the helm are expressing increasing concerns about the introduction of the Third Package and insist on additional consultations.
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