RUSSIAN ENERGY — 2015 Release — September 2016 CONTENTS 5 Macroeconomy 13 OIL 6 Economic growth in the leading economies 14 Countries with largest oil reserves 24 Russian petroleum products exports of the world to OECD countries 14 Russia’s share in the world oil reserves 7 Economic growth in Russia and leading world 25 World oil prices 15 Сrude oil and condensate production in Russia economies (quarterly data) 25 Petroleum products exchange trading in Russia 15 Сrude oil and condensate production in Russia 8 Monthly dynamics of industrial production (spimex) by region in Russia and leading industrial economies 25 Average motor fuel prices in Russia of the world 16 Top oil producing countries 26 Average gasoline (RON-92) prices in Russia 8 Main commodity prices (IMF indices) 16 Russia’s share in the world oil production by region 9 Dynamics of main exchange rates 17 Сrude oil production by leading Russian 27 Gasoline (RON-92) price change in Russia oil companies 10 Change in investments in fixed capital by region of Russia 18 Top oil consuming countries 28 Investment in Russian oil sector 10 External trade of Russia: exports and imports 18 Russia’s share in the world oil consumption 28 Percentage change in oil cector investment of goods, trade balance 19 Production and flaring of associated gas 10 Structure of Russian federal budget incomes in Russia and non-oil-and-gas federal budget deficit 19 Associated gas flaring by region 11 Energy intensity of Russian GDP according 19 Associated gas utilisation to different estimates 20 Countries with largest refining capacities 11 СO emissions in Russia and other countries 2 20 Russia’s share in the world refining capacity 21 Primary crude oil refining in Russia 21 Crude oil refining in Russia 22 Basic petroleum products output 22 Motor fuel output by emission standarts in Russia 22 Gasoline output structure in Russia 23 Petroleum products shipment in russian regions 24 Russian crude oil and petroleum products exports Russian Energy — 2015 3 Russian Energy — 2015 4 29 Natural Gas 41 Coal 51 Petrochemicals 30 Countries with the largest natural gas reserves 42 Countries with largest coal reserves 52 Production of petrochemical feedstocks in Russia 30 Russia’s share in the world natural gas reserves 42 Top coal producing countries 52 Synthetic rubber production in Russia 31 Top natural gas producing couturiers 42 Russia’s share in the world coal production 52 Petrochemical feedstocks refining 31 Russia’s share in the world natural gas 43 Explored coal reserves in Russia by main basin production 53 Plastics production in primary forms in Russia 43 Coal production in Russia by main basin 32 The share of LNG in the world gas trade 53 Average annual producers prices of some 44 Coal production in Russia by region petrochemical products 32 Russia and other countries in world exports 44 Coal production and upgrading (at plants) of natural gas 54 International trade volumes of some in Russia by type petrochemical products 33 Russia`s largest natural gas fields: reserves 45 Russian investment in coal industry 54 Russian investments in petrochemical industry 34 Major producing gas fields in Russia 45 Largest coal producers in Russia 55 Change in polymers production and consumption 35 Natural gas in Russia: production, consumption 46 Top coal consuming countries in Russia and exports 46 Russia’s share in the world coal consumption 35 Russia’s natural gas production by region 47 Coal consumption in Russia 57 Electricity 36 Russia’s natural gas production by company 47 Average domestic coal prices in Russia 36 Independent gas producers in Russia 58 Installed capacity in Russia 48 Structure of Russia’s coal exports by destination 37 Russia`s natural gas consumption by sector 58 Additional power capacity in UES of Russia 49 Top coal exporting countries 37 Natural gas consumption in the top natural in 2014: total and by the Capacity Delivery gas consuming countries 49 World coal prices Agreement (CDA) 37 Investment for Russian regions gasification 49 Russia’s share in the world coal exports 59 Investments in generation, transmission and distribution of electricity in Russia 37 Russia’s gasification level 59 Change in investments in electricity in fixed 38 LNG production and exports in Russia capital of Russia 38 Share of Russia`s LNG exports by destination 60 Average electricity price by consumers 38 CNG consumption in road transport (nominal prices) 38 The world prices of natural gas 60 Electricity price for households exceeds the price for industry 39 Share of Russia`s natural gas exports by destination 61 Electricity consumption growth in the UES of Russia 61 Industrial Production Index in Russia and federal districs MACROECONOMY Global economic growth decelerated in 2015 because of a slowdown in big emerging economies but that gives a hope for stabilization or even reduction of greenhouse gas emissions Russian Energy — 2015. Macroeconomy 6 Economic growth in the leading economies of the world 2005-2015, % ch. y/y In 2015 the global economy faced the new slowdown: its growth equaled rate only of 3.1%. That was the worst result since 2002, except the crisis of 2008-2009. Growth rates in emerging economies are going down for the fifth consecutive year, while developed countries demonstrated in 2015 the most rapid upturn for the last 5 years. The dynamics of developing countries was supported by India: for the first time in the XXI century India overcame China in terms of economic growth indicators, and that relation between the two economies will (most probably) remain stable, due to Chinese structural economic downturn. Brazil and Russia as commodity-dependent economies sharply stopped in 2015. China Russia Germany France UK Italy Japan US Brazil India 15,0 10,0 5,0 0 -5,0 -10,0 Source: IMF Economic growth in Russia and leading world economies (quarterly data) 2013–2015, % ch. q/q, seasonally adjusted data China 2,5 Economic growth in China in each quarter of 2015 was slightly 2,3 less than in the same quarter of 2014. But there were no 2,1 instant drops. Consequently annual growth went under 7 %. 1,9 Planned targets for 2016 are also set around this level. 1,7 1,5 ЕU-28 0,6 0,5 0,4 Low energy prices partially helped to maintain sustainable 0,3 0,2 growth in the USA (2.4 % as in the previous year) and in the 0,1 EU (almost 2 %, in 2014 it was 1.4 %) but their influence was 0 ambiguous: they had a negative impact on investments, so that the slowdown in US in late 2015 is partially US attributed to that effect. In addition, low energy prices strengthened the deflationary pressure, which constrained 1,2 economic activity in the developed countries. Moreover, the 0,9 0,6 acceleration of the economic growth in the EU was due to 0,3 the weakness of euro in 2015. 0 -0,3 Russia 1 The Russian economy went through a hard landing in 0 early 2015 but in the second half of the year the situation -1 stabilized. GDP fell by 3.7 % in 2015. The crisis was especially -2 sharp in manufacturing (–5.1 % of value added compared -3 to 2014), construction (–7.4 %) and trade (–10 %), while mining -4 (+1.1 %) and agriculture (+3.1 %) increased their value added I II III IV I II III IV I II III IV in real terms. 2013 2014 2015 Sources: World Bank, Eurostat Russian Energy — 2015. Macroeconomy 7 Russian Energy — 2015. Macroeconomy 8 Monthly dynamics of industrial production in Russia and leading industrial economies of the world 2013-2015, Dec. 2012 = 100, seasonally adjusted data According to World Bank, the growth of global The strength of the dollar in 2015 negatively Russian industry faced a collapse in early 2015 with The growth of industrial production in China industrial production in 2015 was at its bottom affected the US industry. An additional issue the easement in the second half of the year. Textile was uneven in the context of the slowdown rate since the crisis of 2008-2009. was considered to be of problems was the & clothing industry and machinery manufacturing of external demand and internal investments. tough situation in oil and gas production. were among the worst performers: they experienced Ultimately it considerably fell: from 8.2 % in 2014 an essential drop in production by reached about to 6.2 % in 2015. 10 % in 2015. Food and chemicals industries, on the contrary, significantly grew (+2.0 % and +6,3 % respectively). Germany US Russia China 125 118 111 104 97 90 2013 2014 2015 2013 2014 2015 2013 2014 2015 2013 2014 2015 Sources: World Bank, Rosstat Main commodity prices (IMF indices) 2013–2015, Jan. 2013 = 100 agricultural raw materials metals food energy In 2015 commodity prices plunged under the influence of global economic Metal prices dropped too: IMF metals index slowdown. The most significant losses were spotted in the energy sector: fell dramatically by almost 30 % during 2015. IMF energy commodities index plummeted by 39 % during 2015. Coal Aluminum and lead kept stronger positions 120 demonstrated slightly better performance than other energy carriers: (prices fell only by 10-20 %), while the most 110 it lost only 15-30 % of price on different markets. considerable decrease in prices took place on 100 the markets for nickel and iron ore (–40-45 %). 90 The decrease in food prices reached 15 % by the end of 2015 in comparison The latest developments contributed to a 80 to the beginning of the year. The sharpest decline was spotted on the 70 collapse of steel prices at LME and to a more or markets for meat (beef, pork, lamb cheapened by approximately 30 %) and 60 less strong price drops in markets for different certain grains (prices for wheat and soybean meal also fell by 30 %).