GEOPOLITICS OF ENERGY

Volume 42 Issue 10 November - December 2020 ISSN: 0273-1371

IN THIS ISSUE

Socio-economic Impacts of the Decline in the Global Oil Demand: The Case of

Energy Strategy 2035 As Key Document for Russian Energy Security

Geopolitics of Energy was founded by the late Melvin A. Conant of Washington, DC in 1979. Since 1993, it has been published under the auspices of the Canadian Energy Research Institute. All views expressed in this journal are those of the individual authors and do not reflect the views of the Canadian Energy Research Institute.

Editorial Committee:

Ganesh Doluweera and Allan Fogwill

Contributors:

Salim Abdi Sochi Iwuoha Chilenye Nwapi Kristina Baculáková Peter Jančovič Ayodele Oni Anis H. Bajrektarevic Wenran Jiang Natalia I. Pyatkova Mak Bajrektarevic Tomáš Kajánek Felipe Perez Andrianna Baleha Sanjay Kumar Kar Victor I. Rabchuk Rohit Bansal Larry Kaufmann Tamar Roitman Zuzana Benova Monika Kochajdova Biswajit Roy Nicola Bilotta Ewelina Kochanek Sergey Senderov Tanvi K. Chauhan Kristina Krupová Sutandra Singha Adam Cibul’a Mikhail Krutikhin Rashid Husain Syed Antonia Colibasanu Daniel Lamassa Roger Tissot Robert Cutler Vincent Lauerman Ifemezue Uma Athanasios Dagoumas Vadim Loktionov Konstantina Vlachava Tatiana Bruce da Silva lena Loktionova Sergey Vorobev Fernanda Delgado Michael Lynch Jiqiang Wang Oya S. Erdogdu Joao Victor Marques Mariana Weiss Elena Galperova Robert Mgendi Qianting Zhu Victor Gaspar Nalin Kumar Mohapatra Andrej Zrak Marcelo Gauto Richard Munang Natalia Hlavova

Publication Date: January 26, 2021

Submit manuscripts and Letters to the Editor to Allan Fogwill at the address below or via email at [email protected].

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Socio-economic Impacts of the Decline in the Global Oil Demand: The Case of Russia

Vadim I. Loktionov

In 2020, the world economy faced a sharp drop in oil demand caused by such events as the COVID-19 pandemic and the subsequent lockdown. The most affected global economy segments are transport and aviation, which account for about 58% of total oil consumption in OECD countries1. Airlines around the world are experiencing the worst economic downturn in their history due to a closed sky. Quarantine measures have sharply reduced the use of road transport. Industrial production in all sectors was also affected. In general, the demand for oil and oil products has decreased by more than a third compared to the previous year, leading to a sharp drop in oil prices. Figure 1 shows the average monthly prices for Brent crude oil exported by Russia. The decline in oil demand may be long-term and irreversible. International Energy Agency (IEA) Executive Director Fatih Birol said that April 2020 could be the worst month ever experienced by the oil industry2.

The increase in oil prices during summer 2020 became possible for two reasons: a partial cancellation of quarantine measures and a sharp reduction in oil production, especially by countries participating in the OPEC+ agreement, which agreed to cut production by 9.7 mb/d. Global oil production fell in May from 100 mb/d to 88 mb/d. Oil prices stabilized as oil supply approached oil demand.

Figure 1: Crude Oil Prices (Brent) 3

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20 U.S. dollars per barrel per dollars U.S. 10

0 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul 2019 2019 2019 2019 2019 2019 2020 2020 2020 2020 2020 2020 2020

1 https://www.statista.com/statistics/307194/top-oil-consuming-sectors-worldwide/ (accessed on 24 July 2020) 2 https://www.reuters.com/article/us-iea-oil-birol/april-may-prove-worst-ever-month-for-oil-industry-ieas-birol- idUSKCN21X137 (accessed on 24 July 2020) 3 https://www.statista.com/statistics/262861/uk-brent-crude-oil-monthly-price-development/ (accessed on 24 July 2020)

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Russia is one of the largest oil producers, exporting about 275 mln t of oil per year. Due to the low diversification of the economy and the high dependence of government revenues on oil and gas exports, the fall in global oil demand has significantly impacted Russia's socio-economic situation. As a result of the drop in global oil demand, the Russian crude oil export volume fell. From January to August 2020, oil exports from the Russian Federation decreased by 9.4% compared to the same period in 2019 and amounted to 159.818 mln t. At the same time, oil export revenue decreased by 39.9% and amounted to 48.799 bln dollars. Moreover, oil exports in August 2020 compared to August 2019 fell by 33%. Oil export revenues in August 2020 compared to August 2019 fell 2.2 times and became equal to 4.616 bln dollars.

The decline in business activity and the fall in the country's oil and gas revenues have led to a drop in citizens' real disposable income. By the Federal State Statistics Service (Rosstat), from January to September 2020, Russians' real gross disposable income decreased by 4.3%. According to Russia's official forecast of socio-economic development, the real household gross disposable income will decrease by 3% in 2020 and grow by 3% in 2021. Due to the second wave of coronavirus in Russia, the government's forecast may prove too optimistic. Given quarantine restrictions, the Russian economy cannot restore its full potential, which negatively influences Russians' incomes. According to scientists at the Higher School of Economics (Kuzminov, 2020), Russia's GDP in 2020 will fall by 4.2%-4.3%. At the beginning of 2022, after a recovery growth of 3.1% in 2021, Russia's real GDP will be lower than experts' previous expectations by 4.9%.

Since the decline in global oil demand is likely to be long-term, there will be long-run consequences for the Russian economy. Russia will face the rise of the unemployment rate, fall of household income, etc., but also the structural changes in the Russian economy. In this context, the following issues become relevant:

• how quickly the structural changes in Russia would take place; • what structural changes would take place in the economy; • how structural changes would affect the welfare of Russian citizens; • what should be done to initiate positive changes.

Despite the significant influence of such factors as falling demand and prices for oil, the decline in global economic activity, and closing of national borders, Russia's structural changes will take place very slowly due to its economic system's high inertia. The features of Russia's industries have enhanced the institutional environment, which ensures self-reproduction of the current pattern of the Russian economy development.

Since the collapse of the USSR, the Russian Federation has demonstrated extremely stable economic development patterns, based entirely on the oil and gas industry. The rapid rise in oil prices at the beginning of the new century was based on the Russian oil and gas industry recovery. The oil and gas industry became the engine of economic development. Though the industry was one of the main sectors of the Russian economy, its GDP share rose significantly from 6% in 1998 to 9.1% in 2004 (Slavkina, 2015). The fall in oil and gas prices in 2008-2009 and 2014 had not led to any structural changes in the Russian economy. Thus, there was no uprising in such sectors as renewable energy and high-tech industry. The Russian government repeatedly declared the need to develop non-oil and gas industries, but all these intentions were unfulfilled. A few reasons make the Russian economy maladaptive to changes in the global oil market and determine the pattern of social and economic development.

1. Historical patterns of solving socio-economic problems within the framework of public administration. For the last 20 years, solving social and economic problems within the public administration framework has been formed and regularly reproduced. A sharp increase in oil prices

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facilitated the recovery from economic crisis and reduction of social tension. The growth of oil export revenues ensured a significant inflow of the government’s financial resources to develop the oil and gas industry and address the most important social and economic problems. Priority development of the oil and gas industry ensured the growth of related industries and other segments of the national economy. Simultaneously, there were no fundamental changes in the state , driving a structural transformation of the Russian economy.

Thus, in the early 2000s, the deep economic crisis was overcome thanks to the surge in oil prices, which led to an increase in government export revenues. The Russian economy grew rapidly due to the development of the oil and gas industry. There was a classic export-oriented . From 2001 to 2007, Russia's GDP's annual growth ranged from 4% to 7%. During this period, the Russian government used oil and gas revenues to solve the most critical social and economic problems. The development of the oil and gas industry and a positive foreign trade balance ensured other Russian economic sectors' growth.

Nevertheless, there were no significant changes in the structure of the Russian economy. The oil and gas industry has still provided a significant part of the Russian federal budget revenues (about 40%). The share of mining in the Russian GDP structure increased from 2004 to 2019, from 9.6% to 12.6% (Figure 1).

Figure 2: Oil and Gas Revenues4

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50 12 10 40 8 30 6 20 4 10 2 0 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Oil and gas revenues of the federal budget of Russia (the left axis), % Share of mining in Russia's GDP (the right аxis), %

Imbalances and internal contradictions of the Russian economic development had not been eliminated. They were hidden by the large inflow of foreign currency generated by oil and gas exports. The period of high oil prices ended up with their collapse in 2008. During the global financial crisis, oil production in Russia did not change significantly. The production was at the level of 494 mln t. In 2008, oil export decreased by 15.7 mln t (-6.2% compared to 2007). The oil and gas companies managed to reduce their losses by redirecting export oil and gas flows to the more profitable and stable domestic fuel market. At the same time, there was a sharp decline in foreign currency income. In 2009, Russia's budget deficit amounted to 2.4 trillion rubles, which was about 5.9% of GDP. All unresolved economic problems started to manifest

4 https://minfin.gov.ru/ru/statistics/fedbud/

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themselves again. In 2009, the number of unemployed in Russia increased by 5% to 6.1 mln people (8.1% of the economically active population). The Russian economy contracted by 7.9% compared to the previous year.

With the global economic recovery and the increase in oil prices, the Russian oil export began to rise. The Russian government returned to the economic policy based on the oil and gas industry's dominance and development and adhered to it until 2014, when oil prices fell. The Russian economy followed its pattern again. The Russian government's response to low oil prices' current challenge is essentially similar to previous cases. The officials do not take any significant measures to transform the structure of the Russian economy fundamentally. It seems they wait for a period of low oil prices to end.

2. A low level of the Russian economy investment attractiveness. In the 2000s, foreign investors considered the Russian economy as a promising area of investment activity. The growing economy, supported by high oil prices, was likely to guarantee the increasing investment returns. The global financial crisis of 2008-2009 did not drastically change investors' opinion about Russia’s investment attractiveness, and the foreign direct investment returned to the pre-crisis level in several years. The situation changed significantly in 2014. The Brent crude oil price fell from $112/bbl in June 2014 to $62/bbl in January 2014, causing the economic recession. The difficult economic situation had deteriorated since the imposition of sanctions on Russia.

Growing international tensions and introducing international financial sanctions against Russia have made domestic and foreign direct investment less attractive for investors. It led to a sharp decline in foreign direct investment (Figure 3). From 2013 to 2015, foreign direct investment declined almost tenfold. In 2014, capital outflow from the country set a historic maximum and reached 151 bln dollars. Because of the lack of direct foreign investment and the domestic financial market's weakness, the structure of the Russian economy froze and became insensitive to the changes in the global energy and commodity markets.

3. The continuing nationalization of the Russian economy. The state's share of the Russian economy decreased drastically in the 1990s and became equal to 38% of GDP by 2006 (Russell, 2018). However, in the following years, the Russian government completely changed its policy on this issue. The process of privatization was replaced by the process of nationalization of large energy and finance companies. According to the Federal Antimonopoly Service (FAS), at the end of 2019, the state's share of the Russian economy was about 70% (FAC, 2020). The share of state-owned companies' profits in the largest companies' total profits was high in the last few years. The share of revenue of state-owned companies in the top 100 companies' total revenue in 2017 was about 50% (Analytical Center, 2019).

The process of nationalization creates barriers for a self-organizing society to adapt effectively to the new market conditions. Overregulation of the economy reduces market mechanisms' effectiveness and prevents the economic transformation caused by external changes and carried out by free economic agents. Large- scale investment projects in the energy sector could be fulfilled only with the Russian government's approval or direct support. Thus, no structural changes in the Russian economy could happen without state participation.

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Figure 3. Foreign direct investment, net inflows5

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Foreign direct investment in Russia Net capital outflow from Russia

Given the Russian economy’s high inertia and low production diversity, the drop in global oil demand, deteriorating Russia's current socio-economic situation, will not lead to fast structural changes in the Russian economy. Long-term structural changes will take place against the background of growing economic imbalances. Falling demand and oil prices create additional incentives that reinforce the Russian economy's current imbalances and prevent a more even national income distribution.

The main lever to increase imbalances is the national currency's devaluation, caused by a reduction in Russia's export revenues. Since oil export is the main source of the country's foreign exchange earnings, the ruble exchange rate heavily depends on oil export revenues. The sharp decline in oil prices has led to a decrease in foreign currency earnings and, as a result, to the ruble's devaluation. The current situation is similar to the ones of 2008 and 2014, when due to the decrease in oil exports, Russia's foreign exchange earnings fell, causing a fall in the ruble exchange rate.

In 2008, because of the global financial crisis, the Russian economy's growth slowed down sharply. The stagnation was intensified by the military conflict between Russia and Georgia. In 2009, there were a number of dramatic changes in the official ruble/dollar exchange rate. From January 1 to 21, the ruble lost 13.71% of its value against the dollar (the ruble/dollar exchange rate fell from 29.39 to 33.42). The ruble exchange rate at the end of September was about 36.5 rubles per dollar.

5 https://data.worldbank.org/indicator/BX.KLT.DINV.CD.WD?locations=RU (accessed on 21 October 2020)

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Another period of oil price decline and international instability, caused by the aggravation of Russian- Ukrainian relations, led to the ruble collapse. At the end of 2013, the ruble exchange rate was 31.8 rubles per dollar. In 2016, the exchange rate was 66.9 rubles per dollar. The beginning of the fall in demand and oil prices in 2020 also led to another devaluation of the ruble. The ruble exchange rate began to fluctuate between 65 and 70 rubles per dollar.

As a result, the current drop in demand for oil and oil prices will impact the Russian industries that orient towards the domestic market and depend on imported goods and raw materials. The ruble devaluation increases the oil and gas companies’ investment attractiveness by reducing the other Russian companies' investment attractiveness. From 2011 to 2016, there was steady investment growth in the oil and gas industry. The share of investments in oil and gas companies in the total volume of investments in the Russian economy increased during the years of oil price decline and international sanctions against Russia. Thus, the share increased from 16% in 2013 to 18.9% in 2016. This growth occurred when the absolute values of investments decreased from 6352 bln rubles to 6219 bln rubles. Thus, it is very likely that the Russian oil and gas companies will receive relatively more resources than other companies. Since the net outflow of capital from the country and the ruble devaluation have damaged, above all, companies focused on Russia's domestic market. This will increase imbalances in the Russian economy. As a result, the oil and gas industry will continue to dominate the GDP structure.

The social consequences of the decline in oil demand will not be positive. Economic imbalances, ruble devaluation and rising import prices reduce Russia’s quality of life due to rising inflation and declining real household incomes. Real incomes have not increased over the past six years. From 2014 to 2017, real disposable incomes rapidly decreased. The growing gap between the incomes of the richest 1% of the population and the rest of the population aggravated the social consequences of the decline in global oil demand (Mareeva, 2020). In 2018, real disposable income showed almost zero growth (+ 0.1%) and, therefore, did not improve quality of life.

When the energy sector plays a leading role in the national economy, production is poorly diversified, and many manufacturing enterprises operate with a low margin of safety. Negative processes caused by falling oil demand and oil prices lead to an avalanche-like effect, expressed in the fall of aggregate demand and business activity. A decrease in domestic demand and economic activity harms the quality of life. The social sphere may increase the destructive effect of an adverse event, reducing the efficiency of adaptive mechanisms of the economy by a high level of social inequality, low mobility of human resources and high level of corruption.

Russia's long-term economic growth in the current unfavourable situation on the global oil market can be ensured by developing and implementing comprehensive energy and economic policy aimed at structural changes in the national economy. The policy should be focused on production diversification, domestic demand growth and income inequality reduction. In addition, the adaptive mechanism of the free market could play its role in the recovery of the national economy. However, the analysis shows that due to the Russian economy's high inertia, the drop in oil demand will not lead to fundamental structural changes in the Russian economy in the next few years. Only with changes in the public administration framework will the fall in the global oil demand led to positive structural changes in the Russian economy.

References Analytical Center for the Government of the Russian Federation (2019). Public sector in the Russian economy, 24 p. Available online: https://fas.gov.ru/documents/687048 (accessed on 17 September 2020) Kuzminov Ya. I. (ed.) (2020). Russia in a new era: the choice of priorities and goals of national development. HSE University, 112 p. (in Russian)

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Mareeva S. (2020). Socio-economic inequalities in modern Russia and their perception by the population. The Journal of Chinese Sociology, 7(1). doi: 10.1186/s40711-020-00124-9 Russell M. (2018). Seven economic challenges for Russia. European Parliamentary Research Service, 32 p. doi: 10.2861/227260 Slavkina M.V. (2015). Oil and gas factor of domestic modernization 1939-2008. Vesmir, 432 p. (in Russian) The Federal Antimonopoly Service (FAS) (2020). Report on the competition in the Russian Federation. 606 p. Available online: https://fas.gov.ru/documents/687048 (accessed on 11 October 2020)

About the Author Vadim I. Loktionov, Ph.D., is a senior researcher at Melentiev Energy Systems Institute of Siberian Branch of the Russian Academy of Sciences (ESI SB RAS) in Irkutsk, Russia. He can be reached at [email protected].

This article was prepared with the financial support of the Russian Science Foundation (RSF) (grant №19- 78-00007).

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Energy Strategy 2035 As Key Document For Russian Energy Security

Monika Kochajdova

Introduction

The energy sector and, subsequently, the security of this sector plays a crucial role in the Russian economy. Therefore, whether it was a global or a local crisis, the Russian government had to react to preserve or sustain the national interests - energy security. The current policies had to be amended and adapted to the newly arisen situation to overcome the crisis. As a result of these adaptation measures, new and updated energy strategies were approved to overcome the hardships and ensure energy security. These strategies are always adopted for a longer period to provide guidelines and measures to overcome first shocks and create a sustainable environment. However, the term for which they are adopted makes these strategies an ineffective tool in the long run. The rigidness of the content and the administrative procedure required to adopt a new or amend strategy in force make them unable to react to the fluctuations of global energy markets. Therefore, with the adoption of Energy strategy 2035, a rule was also adopted that Russia's energy strategy would be subjected to update every five years. Hence, the strategy in force more realistically reflects the current market situation.

At first, we will focus on the Energy strategy 2030, which was adopted due to the economic crisis of 2008. This strategy provided us with the forecast and strategies for the energy sector divided into three phases, with Phase no. 1 ending between 2013 and 2015. For our research, we have narrowed the scope of the strategy, and we only focus on the oil and gas production of the energy sector. We compare the numbers predicted in the forecast for Phase no. 1 with the statistical data available for the period. Based on these numbers, we conclude the effectiveness of the forecasted measures.

Secondly, we turn our focus to Russia’s latest energy strategy. Energy strategy 2035, which was adopted due to the crisis in Ukraine in 2014 and the Energy strategy 2030 was adopted as a reaction to the crisis. It continues to follow the previous strategy's objectives, such as infrastructure development, sustainment of oil and gas production, exploration and exploitation of new oil and gas sources in the Arctic, etc. Aside from these objectives, the Energy strategy 2035 also focuses on the need for innovations and technological development, which it identifies as a key requirement to secure energy security. We again narrowed our scope of research. We focus on oil and gas production and the measures adopted in technological innovations and research. Generally speaking, energy strategy is a key document for forecasting and setting objectives for directing the energy sector policies and providing a framework for ensuring Russia's energy security.

In the last part, we focus on the critical review and comparison of the previous Energy strategy 2030 with the current Energy strategy 2035. We compare these two documents' objectives in the scope of oil and gas production and technological research and innovations. This critical review aims to conclude which of these strategies adopted more appropriate measures to cope with the ongoing crisis. Based on these measures and the objectives they aim to achieve; we conclude the result of the energy strategy's effectiveness.

Energy strategy is a key document for sustaining the energy security of Russia. Lately, Russian energy security was affected by the unstable situation in Ukraine, which rose requirements for updating the energy strategy. As a result, the Energy strategy 2035 was adopted. Since this is a relatively new document and

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is in force only for a brief period, further observations and subsequent research on effectiveness and other arising questions would be required. However, we firmly believe that this article provides a basic introduction to this topic and sets the ground for further discussion.

Energy Strategy of Russia for the period 2030

The Russian Federation's energy strategy is a key document for understanding Russia's approach in the energy sector in a specified period. Generally speaking, energy strategy defines key objectives in the energy sector industry and means for their achievement. In each section, the strategy describes the situation in the energy sector's specific branch (e.g., oil, gas, LNG, renewable energy, etc.). It sets out objectives or goals in each of these branches and potential means for their fulfillment. Russia's energy strategy for the period up to 2030 was approved by Decree No. 1715 -r of the Government of the Russian Federation dated on the 13 November 2009 (hereinafter referred to as "Energy strategy 2030 ")1 in reaction to the economic crisis of 2008. Due to the economic shocks caused by the economic crisis, Russia was forced to revise its current policies and tailor them to the new situation. The Energy strategy 2030 sets new guidelines for developing the energy sector in the transition of the Russian economy to the innovative development path while considering possible fluctuations in foreign and domestic economic development conditions.2 The strategy identifies main issues, such as low level of investment in the development of the fuel and energy complex, the dependence of the Russian economy and its energy sector on the natural gas, slow development of energy infrastructure and failure to invest in the industrial potential to meet the scientific and technological level of other countries.3

Next, we turn our focus to the specific branches of the energy sector. In terms of the oil complex, Energy strategy 2030 sets out objectives focusing on stable and economically efficient production that would meet domestic as well as global market demand, provide stable revenues for Russia's budget and finally yet importantly secure investments and innovative renewal of the oil complex aimed at enhancement of energy, economic and environmental efficiency. These general objectives are to be achieved by developing new oil complexes in the country's eastern regions, exploring and developing sources in the Arctic shelf, developing energy infrastructure, etc.

The development of these new oil production complexes aims to stabilize the production levels, which may be endangered by the decrease in production capacities of current "old "oil fields. As for the infrastructure, Russia started projects to develop not only international export routes, e. g. North Stream and South Stream and the domestic infrastructure, e. g., a pipeline connecting the Yamal Peninsula to the main Russian infrastructure.4 Table 1 represents the oil production in Russia proposed by the Energy strategy 2030. As we may see in Table 1, the Energy strategy 2030 divides the objectives into several phases, with the first phase ending between 2013 and 2015. Phase 1 is crucial for us to assess whether the objectives set out in the Energy strategy 2030 were real enough to be fulfilled.

Table 1: The forecast of phase – by – phase oil production development for the period up to 2030

2005 2008 Phase 1 Phase 2 Phase 3 (actual) (actual)

Total oil production (million tons) 470.2 487.6 486-495 505-525 530 - 535

same (in % as compared to 2005) 100 103.7 103-105 107-112 113-114

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Source: Ministry of Energy of the Russian Federation, (2010): ENERGY STRATEGY OF THE RUSSIAN FEDERATION FOR THE PERIOD UP TO 2030. pg. 145. [Online]. [01.08.2020]. Available on the Internet: http://www.energystrategy.ru/projects/docs/ES-2030_(Eng).pdf

Graph 1: Russian oil production levels between 2013 and 2015

48 46 44 42 40

millions tones 38 36 01.13 01.02.2013 01.03.2013 01.04.2013 01.05.2013 01.06.2013 01.07.2013 01.08.2013 01.09.2013 01.10.2013 01.11.2013 01.12.2013 01.01.2014 01.02.2014 01.03.2014 01.04.2014 01.05.2014 01.06.2014 01.07.2014 01.08.2014 01.09.2014 01.10.2014 01.11.2014 01.12.2014 01.01.2015 01.02.2015 01.03.2015 01.04.2015 01.05.2015 01.06.2015 01.07.2015 01.08.2015 01.09.2015 01.10.2015 01.11.2015 01.12.2015 time period

Source: Own processing of data from Statista, (2020): Oil production in Russia from 1998 to 2019 (in million metric tons). [Online]. [02.08.2020]. Available on the Internet: https://www.statista.com/statistics/265219/oil-production-in- russia/

Production of oil for the year 2013 amounted to 523 million tons, for 2014 526 million tons and 2015 533 million tons. Based on these numbers, we see that the Russian energy sector successfully managed to recover from the shocks caused by the economic crisis. The numbers forecasted for Phase 1 were surpassed. Not taking into account these numbers, the Energy strategy 2030 also took into account fluctuations in the global market price. In the case of oil market price fluctuation or its rapid downfall, the government has implemented these specific situations. Should such a situation arise, the state would provide necessary support through financial investments, tax optimization, and sustainment of oil companies' financial and economic stability. However, based on the numbers in Table 1 compared to those in Graph 1, this help did not seem necessary.

Development in the gas branch of the energy sector is similar to that of the oil sector. The oil branch's key objectives are set on stable production that would sufficiently meet demand in the domestic and foreign markets and develop domestic gas pipeline infrastructure and improve the gas industry's organizational structure to increase economic efficiency. Concerning the infrastructure projects, aside from those listed above, projects such as the Blue stream, also known as TurkStream project (connecting Russia and Turkey), and the development of seaport and transport infrastructure for liquid hydrocarbons transportation (e. g. liquefied natural gas)5. Export of Russian gas is primarily performed based on long-term contracts. Considering these facts, the Energy strategy 2030 predicts increased participation of Russian gas companies in developing gas deposits in other countries, constructing new international gas pipelines, and coordinating export policies with target countries.6 In Table 2, we can observe the forecast of the gas production in Russia during the effectiveness of the Energy strategy 2030.

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Table 2: The forecast of phase – by – phase gas production development for the period up to 2030 (billion m3)

2005 2008 Phase 1 Phase 2 Phase 3 (actual) (actual)

Gas production - total 641 664 685-745 803-837 885-940

Source: Source: Ministry of Energy of the Russian Federation, (2010): ENERGY STRATEGY OF THE RUSSIAN FEDERATION FOR THE PERIOD UP TO 2030. pg. 146 [Online]. [01.08.2020]. Available on the Internet: http://www.energystrategy.ru/projects/docs/ES-2030_(Eng).pdf

Graph 2: Russian gas production levels between 2013 and 2015

70 60 50 40 30

Bilion of m3 20 10 0 01.01.2013 01.02.2013 01.03.2013 01.04.2013 01.05.2013 01.06.2013 01.07.2013 01.08.2013 01.09.2013 01.10.2013 01.11.2013 01.12.2013 01.01.2014 01.02.2014 01.03.2014 01.04.2014 01.05.2014 01.06.2014 01.07.2014 01.08.2014 01.09.2014 01.10.2014 01.11.2014 01.12.2014 01.01.2015 01.02.2015 01.03.2015 01.04.2015 01.05.2015 01.06.2015 01.07.2015 01.08.2015 01.09.2015 01.10.2015 01.11.2015 01.12.2015 TIme period

Source: Own processing of data from Statista, (2020): Natural gas production in Russia from 1998 to 2019 (in billion cubic meters). [Online]. [02.08.2020]. Available on the Internet: https://www.statista.com/statistics/265335/natural-gas- production-in-russia-since-1998/

To sum up, the gas production for Phase 1 of the Energy strategy 2030 (period 2013-2015) was 667,8 billion m3 in 2013, 641,9 billion m3 in 2014 and 635,5 billion m3 in 2015. Compared to the data forecasted in Table 2, the initial predictions for Phase 1 were not met. Failure to meet the forecast's objectives was, in our opinion, caused by the events in Ukraine in 2014 and the subsequent economic sanctions against the Russian energy sector, which hindered the import of foreign technologies crucial for gas production.

Russian Energy strategy 2030 was a document providing previous strategy results for the period 2020 and main forecasts, challenges and objectives of the energy sector for the period up to 2030, key elements required for the development of the Russian energy sector and expected results are deriving from the implementation of this strategy.6 As we have seen, based on the comparison of the forecasts with the actual numbers, the oil branch of the energy sector was increasing production. It surpassed the expected numbers, while on the other hand, the gas branch of the energy sector was declining in production, not fulfilling the forecasted numbers and continue to decline throughout Phase 1 of the Energy strategy 2030. With the rise of yet another crisis in Ukraine and Crimea in 2014, there was a need for readjustment of the Russian energy strategy. In reaction to this crisis and economic sanctions of the USA and E.U., the Russian

6 Ministry of Energy of the Russian Federation, (2010): ENERGY STRATEGY OF THE RUSSIAN FEDERATION FOR THE PERIOD UP TO 2030. pg. 11 [Online]. [30.07.2020]. Available on the Internet: http://www.energystrategy.ru/projects/docs/ES-2030_(Eng).pdf

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authorities started to work on a new key energy sector document – Energy strategy for the period up to 2035.

Energy Strategy of Russia for the period 2035

Similarly, as the Energy strategy 2030, the Russian Federation's Energy Strategy for the period up to 2035 (hereinafter referred to as the "Energy strategy 2035") was intended to be adopted as a reaction to the arisen crisis in Ukraine from 2014. Drafting of the Energy strategy 2035 began in 2015. However, the final document was adopted by the Government of the Russian Federation No. 1523-r dated 9 June 2020.7 During this period, the Russian government was adopting short-term reactive measures in reaction to market fluctuations.7 Ad hoc measures are clear examples of the administrative command system, which relies on the central government's reactive decisions. Such a system allocates the resources via ad hoc directives top to down, from the measure's author to the end target.

The indicative planning system is based on the early identification of key sectors of the economy, potential risks, and rapid resource allocation implementation. In the case of market fluctuations, stable and sustainable development might be kept. Aspirations to liberate the Russian energy market and implement the indicative planning system were intended in the Energy strategy 2030 and are also projected to Energy strategy 2035.8 However, international sanctions from 2014 have strengthened the argument favouring state control and oversight of the energy sector. Nonetheless, Energy strategy 2035 is yet another example of a long-term strategy, in which Russia is reacting to future threats such as:

• The rapid growth of new energy-sector technologies; • Globalization of the world energy market; • Growing competition, primarily posed by LNG and shale oil; • Increasing non-competitive means of economic competition (a.k.a. sanctions); • Promotion of green (renewable) energy.9

The above-stated threats have been incorporated in the general objectives of the Energy strategy 2035. Therefore, the goals of the Energy strategy 2035 are:

• Sustaining Russia's position in the global energy market; • Diversifying energy exports towards Asian markets; • Ensuring energy availability and affordability for domestic consumers; • Reducing energy intensity and emissions; • Developing renewable energy systems.10

According to global statistics, in 2019, Russia was after the USA and Saudi Arabia, with an 11% share of global production third major oil producer globally. This share represents approx. production of 11,49 million barrels of oil per day.11

7 Ministry of Energy of the Russian Federation, (2020): ENERGY STRATEGY OF THE RUSSIAN FEDERATION FOR THE PERIOD UP TO 2035. [Online]. [01.08.2020]. Available on the Internet: https://minenergo.gov.ru/node/1026

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Graph 3: Oil production in % of the top 10 world producers

20 18 16 14 12 10 8 6 4 2 0 United Saudi Russia Canada China Iraq United Brazil Iran Kuwait States Arabia Arab Emirates

Source: Own processing of data from U.S. Energy Information Administration, (2020): What countries are the top producers and consumers of oil?. [Online]. [05.08.2020]. Available on the Internet: https://www.eia.gov/tools/faqs/faq.php?id=709&t=6

As for the natural gas production in 2019, Russia, after the USA, with the production of over 740 billion cubic meters, is the second-largest producer of natural gas in the world.12

Graph 4: Natural gas production in bcm of the top 10 world producers

1000 900 800 700 600 500 400 300 200 100 0 United Russia Iran Canada China Qatar Australia Norway Saudi Algeria States Arabia

Source: Own processing of data from Enerdata, (2020): Global Energy Statistical Yearbook 2020. [Online]. [06.08.2020]. Available on the Internet: https://yearbook.enerdata.net/natural-gas/world-natural-gas-production- statistics.html

The Energy strategy 2035 aims not only to keep the above-described production volumes, but Russia also sets even more ambitious objectives. It plans to increase the production of oil and natural gas (hereinafter referred to as the "primary resources") by 4.8% by 2024.13 Creators of the Energy strategy 2035 have learned from previous strategies. Its ambitious objectives, which were due to the fluctuations on the global market unachievable and in Energy strategy 2035, came up with two scenarios for producing primary resources. The first scenario is labelled as an optimistic forecast, which sets the cap for production approximately around the same numbers as 2019. The second scenario – labelled as the pessimistic

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forecast, sets a production cap on 490 million tons of crude oil by 2035, and for gas production, the cap is around 860 bcm by 2035.14

To achieve these objectives, the reformers are aware that the projects commenced and are described in the Energy strategy 2030 have to be finished now more than ever. However, with the strong negative effect of the 2014 sanctions, which resulted in the financial funding freeze and export ban on mining and exploration technologies, these projects' completion may be hindered even further. Creators of the Energy strategy 2035 were aware of this issue and provided several pathways to stabilize production. We can break these pathways into four different categories:

• Legal and tax reforms, which are aimed at modifying the export duty regimes and the tax burden; • Exploration and development of new sources of primary resources; • Diversification of the exports and completion of export infrastructure; • Modernization of technical equipment and import substitution of mining and exploration technologies.

Russia needs to continue the exploration processes and the search for new sources of primary resources. As stated in the Energy Strategy 2030, exploration focuses on the Yamal Peninsula, Easter and Subarctic areas. Old oil and gas fields are gradually depleting and cannot keep up with domestic and export demands. Therefore, again exposure and development of new sources of primary resources are vital for stabilizing and increasing these resources’ production so that the Energy Strategy 2035 is met.

To expose these sources, firstly exploration and secondly mining technologies would be required. Foreign companies supported exploration projects in the arctic, e.g., ExxonMobil, in which partnership with Russian Rosneft boosted oil exploration in the Arctic regions and offshore production. ExxonMobil not only provided investments and expertise but also provided much needed technology.15 Russia was relying on the technologies provided by foreign cooperating companies. However, this changed with 2014 western sanctions. One of the sanction list items is the restriction of Russian access to certain sensitive technologies and services that can be used for oil production and exploration (the "sanctions ").16 Such sanction restriction resulted in an inability of foreign companies to supply technologies critical for drilling and exploration. More so, Russia is 99% dependent on the import of this critical equipment.17 Among other equipment, the most crucial one is the hydraulic fracturing equipment, which is crucial for sustaining the current production. Pursuant to sanctions, the future ability of the energy sector to maintain production levels is threatened. Russian mining technologies are becoming outdated and are nearing their expiration date. With this said, the foreign technologies were intended to exploit new sources of primary resources and replace old equipment, so the current production is maintained. With sanctions in force, the Russian government was forced to find a different solution to this issue. As in many other sectors of the economy, the Russian government turned to import substitution programs. These programs focus on the innovations, technological development, modernization and digitalization of the energy sector. Firstly, the Energy strategy 2035 describes the need to invest in technological development and increase the number of organizations focusing on technological innovations. Secondly, it is forecasted that engineering centers and test sites would be created, where these new technologies are to be assembled and tested. Russia encourages commercialization in the field of technological research and business development in the field of innovations. With that said, Russia plans to increase its participation in development and innovations by providing state support for these projects.18

However, modernization plans do not solely rely on innovations. Part of the plan is to modernize, upgrade or build infrastructure for the domestic supply and transportation energy products (i.e., oil and gas) and

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build international export pipeline infrastructure. Domestic infrastructure development aims to secure the supply of energy to all the regions. With the secured and stable supply of energy, it is forecasted that social and economic development shall be ensured.19 On the other hand, achieving diversification of exports of primary resources to international markets is another key objective contributing to Russia's energy security. In the last decade, political relations with Europe are worsening, but the European market is also transforming from carbon-dependent energy to more renewable and green energy. Therefore, it is only natural that Russia shifted its major focus from Europe to other world markets, specifically Asian markets.20 With this shift, it is expected that Russia would sustain or even increase its export levels.

Sustaining production levels of resources allocated in Russian territory is vital for achieving its energy security. As mentioned, it is difficult to predict the fluctuations in the energy markets. Therefore, the Energy strategy 2035 provides two scenarios: pessimistic and optimistic, which provide forecasted, desired limits of production and minimum limits of production to sustain the domestic and foreign demands. Meeting at least the pessimistic forecasts of the Energy strategy 2035 is vital for the formation of the Russian budgetary system's revenues.

Critical review and comparison of the Energy strategy 2030 and Energy strategy 2035

Energy strategy is a key document for forecasting and setting objectives for directing the energy sector policies. Both Energy Strategies 2030 and 2035 were implemented to respond to a crisis that arose in 2008 and 2014. Even though both documents react to the crisis in general, in concreto, these situations differ substantially. In 2008, the world was recovering from a crisis, the economic crisis. Since this was a global event, countries had tendencies to cooperate rather than isolate themselves to overcome the economic crisis's negative effects. Therefore, with the global cooperation achieving the laid down objectives were considerably easier.

On the other hand, the crisis of 2014 is quite different. Conflict in Ukraine is more of a local nature, and the only sanctioned entity was Russia. As a result of this conflict, Russia was and to this day is facing sanctions, which among other embargoes import of key technologies required for exploitation and mining of primary resources. Sanctions against Russia also affected Russia's credibility and view by some of its political and economic partners. The position of an untrustworthy or unpredictable partner affected not only political relations but also those economic. Specifically, these negative effects are also projected in the Russian energy sector. Any changes to this sector are viewed very sensitively since the energy sector is crucial for generating national budget revenues.

Energy strategy 2030 and Energy strategy 2035 state key objectives and forecasts for the energy sector's effectiveness and sustainment. To compare these documents, the objectives are quite similar. The energy sector forecasts are the development of infrastructure, support of technological and scientific improvements, diversification of domestic energy demands, and sustaining the production of primary resources to meet the domestic demands. Some of the forecasts of the Energy strategy 2030 were achieved and even surpassed, however fulfilling forecasts in other parts was less successful. Aside from objectives of the Energy strategy 2030 also identifies the potential risks of lack of investments in the development of energy complex, dependence on gas consumption, slow development of energy infrastructure, and lack of technological and scientific innovations compared with other countries. Suffice to say, most of these objectives were not finished. If we look at the contents of the Energy strategy 2030, it provides long-term forecasts and objectives. On one side, it is important to have a long-term strategy. However, Energy strategy 2030 does not pay much attention to the fluctuations in the global markets. The absence of short-term proactive mechanisms makes this strategy rigid and ultimately unable to adapt to the markets' fluctuations. Depending on market fluctuations change may require separate ad hoc decisions

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or complete revision of the energy strategy. Following up on the Energy strategy 2030, the Energy strategy 2035 continues to follow the previous strategy's objectives.

In comparison with the Energy strategy 2030, Energy strategy 2035 provides a scope of production limits raging from the optimistic – desired limits of production to the pessimistic – minimal limits of production required to meet the domestic and foreign demand. This provides the strategy with a certain flexibility, which allows it to react to the market fluctuations slightly. For example, even if the market fluctuations cause a downfall in production, but at the same time, minimum production levels are sustained, then. As a result, the objectives are kept. However, with the objectives set in the long term, the Energy strategy 2035 has only a little flexibility and, therefore, as the previous strategy is quite rigid. In addition, with the western sanctions in force, all intentions for shifting some of the decision-making processes from the central administrative body to the private sector were ultimately thwarted.21 Therefore, any major fluctuations in the global markets might require ad hoc operative decisions or revision of the central level’s energy strategy. Administrative processes on the central level may take quite some time, and as such, it may affect the effectiveness and up-to-dateness of the decisions. We deem such a decision-making system to be highly ineffective and, in the long-term, may cause further issues.

As well as in Energy strategy 2030, Energy strategy 2035 strives to maintain the sustainability of economic development, production and exploitation of new sources of primary resources. Energy strategy 2035 continues in exploration and exploitation projects in Eastern Siberia and Arctic areas. However, to continue these projects, special technological equipment is required. As mentioned above, Russia was relying on foreign companies for technological assistance. The possibility of cooperation or technological assistance ended with the implementation of western sanctions. Energy strategy 2035 describes the need for increased investments in technological development and innovations. Import substitution of technologies is the new reality for Russia. Current technologies are reaching their serviceability, and their replacement would be required. New technologies are also required for exploration and then subsequent exploitation of the new sources of primary resources. Plans for stimulating research and technical development were also included in the previous strategy, so we dare to be quite skeptical about realizing these measures. However, compared with the Energy strategy 2030, the Energy strategy 2035 is much graver and needs immediate measures and solutions. If these measures would not be implemented, it may directly impact Russia's production capabilities and, as a result, energy security as a whole.

Conclusion

To sum up, we have observed a decade of strategies and measures to effectively ensure Russia's energy security. Among other documents, these measures are primarily summarized in the Energy strategy 2030 and Energy strategy 2035. As mentioned, these documents provided forecasts for the Russian energy sector’s development and measures on how to ensure and sustain energy security for the upcoming years. Due to the Russian energy sector's extensive scope, we have narrowed our focus on the energy sector’s oil and gas branch.

Firstly, we have reviewed the Energy strategy 2030, which represents measures and forecasts for the Russian energy sector from 2008 to 2030. It was implemented as a reaction to the global economic crisis that struck in 2008. It identified the major weaknesses that the energy sector was facing, such as low development of infrastructure and the inability to use Russia's industrial potential. Subsequently, Energy strategy 2030 provides objectives and plans by which it aims to fulfill them. Among others, we have identified the need to improve the energy sector infrastructure, the need for diversification of export markets and the continuation of exploration and exploitation of new sources of primary resources. As for the oil branch of the energy sector, production managed to reach the desired objective. On the other hand, the

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gas branch of the sector failed to reach the objective, which created questions around the attainability of the Energy strategy 2030 as a whole.

Secondly, we have analyzed the Energy strategy 2035. As with the previous strategy, it was adopted as a reaction to the crisis. Such a situation arose due to the conflict in Ukraine and the implemented western sanctions against Russia. During the process of devising the strategy arose intentions to liberate the Russian energy market and give more freedom to the private sector. However, after the sanctions, all these intentions were thwarted, and primary decision-making power remained with the central government. This makes adopting quick reactive measures that would reflect the fluctuations in the global market even harder.

Energy strategy 2035 as a long-term strategy follows up on the objectives from the Energy strategy 2030, which includes objectives such as diversification of export markets, increase in technological development and innovations, sustainment of production so that it meets the domestic and foreign demand and continuation of exploration and exploitation of new sources of primary resources. However, with the western sanctions in force that block Western technologies exploration and exploitation ambitions are endangered. In the long-term, Russia will need to solve the issues around the absence of technological capabilities in exploration and production. Energy strategy 2035 presents an increase in funding for the technological centers and support of innovations, which should help realize the technological import substitution strategy. As for the production of oil and gas resources, the Energy strategy 2035 creates a framework represented by the productions’ optimistic and pessimistic scenarios. This provides the Russian energy sector with a space to maneuver and, therefore, flexibly react to fluctuations in the global energy markets. Despite the rigid administrative processes, the Energy strategy appears to be more flexible than its predecessor.

Lastly, we have compared the Energy strategy 2030 and Energy strategy 2035. We have assessed all the production areas that fall within our research, objectives they aim to achieve and measures these strategies plan to implement. The result of this comparison is that the Energy strategy 2035 considers the objectives of previous strategies, follow up on them and tries to more specifically identify and address the current issues that affect Russia's energy security. Overall, the Energy strategy 2035 provides an extensive program for ensuring the energy security of Russia. However, despite the certain degree of flexibility, the Energy strategy is still quite rigid, which may cause possible future issues because of the fluctuations in the global energy markets. Since the Energy strategy 2035 was just recently adopted, further observations, research and assessment would be required to evaluate the effectiveness and the results of the Energy strategy 2035.

About the Author

Ing. Monika Kochajdová is a Ph.D. student, Department of International Economic Relations, Faculty of International Relations at the University of Economics, Slovak Republic. She can be reached at [email protected]

References

1. Alekseev, A.,N., Bogoviz, A., V., Goncharenko, L., P., Sybachin, S., A., (2019): A Critical Review of Russia's Energy Strategy in the Period until 2035. International Journal of Energy Economics and Policy, Econjournals, vol. 9(6), pages 95-102. [Online]. [05.08.2020]. Available on the Internet: https://ideas.repec.org/a/eco/journ2/2019-06-12.html

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2. European Council, (2020): E.U. restrictive measures in response to the crisis in Ukraine. [Online]. [19.08.2020]. Available on the Internet: https://www.consilium.europa.eu/en/policies/sanctions/ukraine-crisis/

3. Henderson, J., Grushevenko, E., (2019): The Future of Russian Oil Production in the Short, Medium, and Long Term. pg. 18. [Online]. [17.08.2020]. Available on the Internet: https://www.oxfordenergy.org/wpcms/wp-content/uploads/2019/09/The-Future-of-Russian-Oil- Production-in-the-Short-Medium-and-Long-Term-Insight-57.pdf 4. Mastepanov, A., M., (2014): On the development of the new Energy Strategy of Russia (ESR- 2035). [Online]. [20.07.2020]. Available on the Internet: https://www.erina.or.jp/wp- content/uploads/2014/12/A-MASTEPANOV.pdf 5. Ministry of Energy of the Russian Federation, (2010): ENERGY STRATEGY OF THE RUSSIAN FEDERATION FOR THE PERIOD UP TO 2030. [Online]. [25.07.2020]. Available on the Internet: http://www.energystrategy.ru/projects/docs/ES-2030_(Eng).pdf 6. Ministry of Energy of the Russian Federation, (2020): ENERGY STRATEGY OF THE RUSSIAN FEDERATION FOR THE PERIOD UP TO 2035. [Online]. [01.08.2020]. Available on the Internet: https://minenergo.gov.ru/node/1026 7. Mitrova, T., Yermakov, V., (2019): RUSSIA'S ENERGY STRATEGY – 2035, Struggling to Remain Relevant. pg 16. [Online]. [01.08.2020]. Available on the Internet: https://www.ifri.org/sites/default/files/atoms/files/mitrova_yermakov_russias_energy_strategy_201 9.pdf 8. Statista, (2020): Natural gas production in Russia from 1998 to 2019 (in billion cubic meters). [Online]. [02.08.2020]. Available on the Internet: https://www.statista.com/statistics/265335/natural-gas-production-in-russia-since-1998/ 9. Statista, (2020): Oil production in Russia from 1998 to 2019 (in million metric tons). [Online]. [02.08.2020]. Available on the Internet: https://www.statista.com/statistics/265219/oil-production- in-russia/ 10. Sukhankin, S., (2020): Russia's Energy Strategy 2035: A Breakthrough or Another Impasse?. [Online]. In: Eurasia Daily Monitor Volume: 17 Issue: 78. [10.08.2020]. Available on the Internet: https://jamestown.org/program/russias-energy-strategy-2035-a-breakthrough-or-another-impasse/ 11. U.S. Energy Information Administration, (2020): What countries are the top producers and consumers of oil?. [Online]. [05.08.2020]. Available on the Internet: https://www.eia.gov/tools/faqs/faq.php?id=709&t=6

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1 Ministry of Energy of the Russian Federation, (2010): ENERGY STRATEGY OF THE RUSSIAN FEDERATION FOR THE PERIOD UP TO 2030. [Online]. [25.07.2020]. Available on the Internet: http://www.energystrategy.ru/projects/docs/ES-2030_(Eng).pdf

2 Ministry of Energy of the Russian Federation, (2010): ENERGY STRATEGY OF THE RUSSIAN FEDERATION FOR THE PERIOD UP TO 2030. pg. 10 [Online]. [25.07.2020]. Available on the Internet: http://www.energystrategy.ru/projects/docs/ES-2030_(Eng).pdf

3 Ministry of Energy of the Russian Federation, (2010): ENERGY STRATEGY OF THE RUSSIAN FEDERATION FOR THE PERIOD UP TO 2030. pg. 28 [Online]. [25.07.2020]. Available on the Internet: http://www.energystrategy.ru/projects/docs/ES-2030_(Eng).pdf

4 Ministry of Energy of the Russian Federation, (2010): ENERGY STRATEGY OF THE RUSSIAN FEDERATION FOR THE PERIOD UP TO 2030. pg. 60 [Online]. [26.07.2020]. Available on the Internet: http://www.energystrategy.ru/projects/docs/ES-2030_(Eng).pdf

5 Barents Observer, (2012): In Russian Arctic, a new major sea port. [Online]. [12.08.2020]. Available on the Internet: https://barentsobserver.com/en/energy/russian-arctic-new-major-sea-port-06-08

6 Ministry of Energy of the Russian Federation, (2010): ENERGY STRATEGY OF THE RUSSIAN FEDERATION FOR THE PERIOD UP TO 2030. pg. 80 [Online]. [29.07.2020]. Available on the Internet: http://www.energystrategy.ru/projects/docs/ES-2030_(Eng).pdf

7 Mitrova, T., Yermakov, V., (2019): RUSSIA’S ENERGY STRATEGY – 2035, Struggling to Remain Relevant. pg 10. [Online]. [15.08.2020]. Available on the Internet: https://www.ifri.org/sites/default/files/atoms/files/mitrova_yermakov_russias_energy_strategy_2019.pdf

8 Ministry of Energy of the Russian Federation, (2020): ENERGY STRATEGY OF THE RUSSIAN FEDERATION FOR THE PERIOD UP TO 2035. [Online]. [01.08.2020]. Available on the Internet: https://minenergo.gov.ru/node/1026

9 Sukhankin, S., (2020): Russia’s Energy Strategy 2035: A Breakthrough or Another Impasse?. [Online]. In: Eurasia Daily Monitor Volume: 17 Issue: 78. [10.08.2020]. Available on the Internet: https://jamestown.org/program/russias-energy-strategy-2035-a-breakthrough-or-another-impasse/

10 Ministry of Energy of the Russian Federation, (2020): ENERGY STRATEGY OF THE RUSSIAN FEDERATION FOR THE PERIOD UP TO 2035. [Online]. [01.08.2020]. Available on the Internet: https://minenergo.gov.ru/node/1026

11 U.S. Energy Information Administration, (2020): What countries are the top producers and consumers of oil?. [Online]. [05.08.2020]. Available on the Internet: https://www.eia.gov/tools/faqs/faq.php?id=709&t=6

12 Enerdata, (2020): Global Energy Statistical Yearbook 2020. [Online]. [06.08.2020]. Available on the Internet: https://yearbook.enerdata.net/natural-gas/world-natural-gas-production-statistics.html

13 Mitrova, T., Yermakov, V., (2019): RUSSIA’S ENERGY STRATEGY – 2035, Struggling to Remain Relevant. pg 16. [Online]. [15.08.2020]. Available on the Internet: https://www.ifri.org/sites/default/files/atoms/files/mitrova_yermakov_russias_energy_strategy_2019.pdf

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14 Ministry of Energy of the Russian Federation, (2020): ENERGY STRATEGY OF THE RUSSIAN FEDERATION FOR THE PERIOD UP TO 2035. pg. 40 and 43. [Online]. [01.08.2020]. Available on the Internet: https://minenergo.gov.ru/node/1026

15 Henderson, J, Grushevenko, E., (2019): The Future of Russian Oil Production in the Short, Medium, and Long Term. pg. 18. [Online]. [17.08.2020]. Available on the Internet: https://www.oxfordenergy.org/wpcms/wp-content/uploads/2019/09/The-Future-of-Russian-Oil-Production- in-the-Short-Medium-and-Long-Term-Insight-57.pdf

16 European Council, (2020): EU restrictive measures in response to the crisis in Ukraine. [Online]. [19.08.2020]. Available on the Internet: https://www.consilium.europa.eu/en/policies/sanctions/ukraine- crisis/

17 Mitrova, T., Yermakov, V., (2019): RUSSIA’S ENERGY STRATEGY – 2035, Struggling to Remain Relevant. pg 28. [Online]. [01.08.2020]. Available on the Internet: https://www.ifri.org/sites/default/files/atoms/files/mitrova_yermakov_russias_energy_strategy_2019.pdf

18 Ministry of Energy of the Russian Federation, (2020): ENERGY STRATEGY OF THE RUSSIAN FEDERATION FOR THE PERIOD UP TO 2035. pg. 10. [Online]. [01.08.2020]. Available on the Internet: https://minenergo.gov.ru/node/1026

19 Ministry of Energy of the Russian Federation, (2020): ENERGY STRATEGY OF THE RUSSIAN FEDERATION FOR THE PERIOD UP TO 2035. pg. 58. [Online]. [01.08.2020]. Available on the Internet: https://minenergo.gov.ru/node/1026

20 Alekseev, A.,N., Bogoviz, A., V., Goncharenko, L., P., Sybachin, S., A., (2019): A Critical Review of Russia’s Energy Strategy in the Period until 2035. International Journal of Energy Economics and Policy, Econjournals, vol. 9(6), pages 97. [Online]. [05.08.2020]. Available on the Internet: https://ideas.repec.org/a/eco/journ2/2019-06-12.html

21 Mitrova, T., Yermakov, V., (2019): RUSSIA’S ENERGY STRATEGY – 2035, Struggling to Remain Relevant. pg 9. [Online]. [01.08.2020]. Available on the Internet: https://www.ifri.org/sites/default/files/atoms/files/mitrova_yermakov_russias_energy_strategy_2019.pdf

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