COURSE OUTLINE

ENERGY IN AND FSU

Professor: Tatiana MITROVA Academic Year 2017/2018: Spring semester

BIOGRAPHICAL INFORMATION

Dr. Mitrova is Director of the Energy Center at SKOLKOVO Business School. She has twenty years of experience in dealing with the development of Russian and global energy markets, including production, transportation, demand, , pricing, taxation and market restructuring. She also has broad experience in working with Russian ministries, as well as major Russian and international energy companies (, , TNK-BP, , RAO UES, Statoil, GDF SUEZ, Wintershall, etc). She is leading annual “Global and Russian Energy Outlook Up To 2040” project.

Her ther affiliations include Scientific advisor at the Energy Research Institute of the Russian Academy of Sciences (ERI RAS), Research Scholar at the Center on Global Energy Policy at Columbia University, Senior Visiting Research Fellow of the Oxford Institute for Energy Studies (OIES).

Dr. Mitrova is a member of the Governmental Commission of the Russian Federation on fuel and energy complex, Russian Council on Foreign and Defense Policy and Valdai Club.

Dr. Mitrova is a graduate of Moscow State University’s Economics Department, and an Assistant Professor Gubkin Oil and Gas University. She has more than 120 publications in scientific and business journals and four books.

COURSE OUTLINE

Session 1: Russian and FSU energy sector historical background

Description:

Topics covered include the role of the energy sector in the USSR, first export projects, ideology of the large centralized energy systems development. Transitional period in 1990-ies: breaking economic ties, shifting regulatory structures. Industrial organization, pricing and subsidies, investment deficit, corporate landscape changes and systemic reform issues.

Required readings: • Russian and CIS Gas Markets and their Impact on Europe // Editor: Simon Pirani. Published in the by Oxford University Press Inc., New York. Oxford Institute for Energy Studies. 2009. Chapter 1. • World Energy Outlook 2011. IEA. Paris. 2011. Part B – Outlook for Russian Energy. Chapter 7.

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Recommended readings: • T. Gustafson. Wheel of Fortune: The Battle for Oil and Power in Russia. Harward University Press. 2012. • J. Henderson, A. Ferguson. International Partnership in Russia: Conclusions from the Oil and Gas Industry. London. 2014.

Session 2: Russian and FSU energy sector macroeconomic background; geopolitics and sanctions

Description:

Historical dynamics of Russian and CIS macroeconomic dynamics, its impact on the energy sector. Case study: course on economic development in resource-rich countries – Russian example. Russia and the Dutch disease: is the availability of resources income helping in modernizing the economy or is the Dutch disease progressively leading to a loss of the Soviet scientific, technological and industrial heritage? Government strategy to deal with the oil and gas money. What is the government doing to avoid the Dutch disease? Potential future developments: how can the Russian situation evolve?

What is the effect of sanctions?

Required readings: • G. Covi. A case study of an advanced Dutch disease: The Russian oil. IMEF Ca Foscari University of Venice, May 2013. PP. 6-25. http://mpra.ub.uni-muenchen.de/46670/1/MPRA_paper_46670.pdf • Russia Economic Report. Structural Challenges To Growth Become Binding // The World Bank. No. 30. September 2013.

Recommended readings: • Russian and Global Energy Outlook to 2040. ERIRAS and Analytical Centre of the Russian Government. ERI RAS. 2013. • E. van der Marel. Beyond Dutch Disease: When Deteriorating Rule of Law affects Russian Trade in High-Tech Goods and Services with Advanced Economies. London School of Economics, July 2012. http://gem.sciences- po.fr/content/publications/pdf/VanderMarel_Dreyer_Beyond%20Dutch%20Disease%2013072102.pdf • Diagnosing Dutch Disease: Does Russia Have the Symptoms? IMF Working Paper, April 2007. http://www.imf.org/external/pubs/ft/wp/2007/wp07102.pdf • Russian Manufacturing and The Threat Of 'Dutch Disease'. A Comparison of Competitiveness Developments In Russian And Ukrainian Industry. OECD Economic Department, January 2007. http://search.oecd.org/officialdocuments/displaydocumentpdf/?doclanguage=en&cote=eco/wkp(2006) 68 • Macroeconomic Policy Frameworks For Resource-Rich Developing Countries. IMF, August 2012 http://www.imf.org/external/np/pp/eng/2012/082412.pdf • Russian Energy Sector: Beyond Sanctions. Russia Direct Report Jan 8, 2015. http://www.russia- direct.org/archive/report-russian-energy-sector-beyond-sanctions

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Session 3: Governance of the Russian oil and gas industry

Description:

Evolution of the Russian oil and gas sector corporate structure. Oil and gas production and exports – drivers for the increasing state control. State controlled companies vs. private companies. Special role of . The changing role of . Power game and competition between different players, the state as an arbitrator. Contradictory relationship between Gazprom and the Government, Rosneft`s rising star: different models of the NOCs interaction with the State. The role of personal relationship and vested interests. How does the government exert an influence on the oil sector? Are the "private" oil companies really private and independent of the government, or are they equally tied to the wishes of the Kremlin? How is the strategic decision-making process organized?

Required readings: • Energy in Russia. Oxford Energy Forum. August 2014: Issue 97. http://www.oxfordenergy.org/wpcms/wp-content/uploads/2014/09/OEF-97.pdf • A. Mehdi, Sh. Yenikeyeff. Governors, Oligarchs and Siloviki: Oil and Power in Russia. IFRI. Russie. Nei. Visions N68. February 2013. PP. 5-22

Recommended readings: • T. Gustafson. Wheel of Fortune: The Battle for Oil and Power in Russia. Harward University Press. 2012. • S. Yenikeyeff. BP, Russian billionaires, and the Kremlin: a Power Triangle that never was. Oxford Energy Comment. November 2011. http://www.oxfordenergy.org/wpcms/wp- content/uploads/2011/11/BP-Russian-billionaires-and-the-Kremlin.pdf • S. Dixon. Organisational Transformation in the Russian Oil Industry. Edward Elgae Publishing Ltd. 2008. • K. Goichi. Issues Involved in the Russian Crude Oil Transportation System and The Role of the State- Owned Pipeline Company, Transneft. IEEJ: August 2005. http://eneken.ieej.or.jp/en/data/pdf/292.pdf • C. Locatelli. The Russian oil industry between public and private governance: obstacles to international oil companies` investment strategies. Energy Policy. July 2004. http://webu2.upmf- grenoble.fr/iepe/textes/CL_EnergyPolicyJuly04.pdf • N. Poussenkova. Rethinking Russia: The Global Expansion of Russia’s Energy Giants/ Journal of International Affairs. Vol. 63, No. 2, Spring/Summer 2010 Page 103-124. http://jia.sipa.columbia.edu/global-expansion-russia%E2%80%99s-energy-giants

Session 4: Main actors and their interests. Case Study: Rise of Rosneft and its confrontation with Gazprom

Description:

The history and rise of Rosneft: is Rosneft going to be the largest oil company in the world? Rosneft ambitions in gas business and increasing competition with Gazprom? Will Rosneft project internationally, as Gazprom has been attempting to do for the past few years? Will Rosneft try to become operator not only for the Russian oil exports to but also gas flows eastwards? Official corporate strategy analyses (based on the official presentation for investors). Can Rosneft effectively amalgamate the different components that

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were added to it? Can it deal with the huge debt that it has underwritten, in particular to complete the takeover of TNK-BP? Is there a future for the numerous alliances that it has concluded with various international oil companies, or are these just short-term opportunistic ventures, with the intention of squeezing out the partners as soon as convenient? The balance of power between Rosneft (I. Sechin) and Gazprom (A. Miller) – how it could develop in the future?

Required readings: • P.Baev. Rosneft, Gazprom and the Government: the Decision-Making Triangle on Russia`s Energy Policy. IFRI. March 2014. http://www.ifri.org/?page=contribution-detail&id=8017 • O. Khvostunova. Rosneft vs Gazprom. Institute of Modern Russia. 30 August 2013. http://imrussia.org/en/economy/543-rosneft-vs-gazprom

Recommended readings: • G. L. White. Rosneft CEO Sechin Enters Spotlight After BP Deal. The Wall Street Journal. November 1, 2012. http://online.wsj.com/article/SB10001424052970204712904578092963775267272.html • M. Katusa. Vladimir Putin Is The New Global Shah Of Oil. Forbes. 10/29/2012 http://www.forbes.com/sites/energysource/2012/10/29/vladimir-putin-is-the-new-global-shah-of-oil/ • D. Busvine, M. Akin, Putin’s energy tsar named as Rosneft CEO. Reuters. 22/05/12. http://business.financialpost.com/2012/05/22/putins-energy-tsar-named-as-rosneft-ceo/?__lsa=1ba6- edd5 • T. Gustafson. Russian Oil Industry at a Crossroads as Infrastructure Ages. The New York Times. December 4, 2012. http://www.nytimes.com/2012/12/05/business/global/russian-oil-industry-at-a- crossroads-as-infrastructure-ages.html?pagewanted=all&_r=0 • J. Henderson. Rosneft – On the Road to Global NOC Status? OIES Working Paper 44. January 2012. • I.Sechin. Rosneft investor day in New-York. 25 April 2013. http://www.rosneft.ru/attach/0/07/06/prezent_sechin_NY.pdf • N. Poussenkova. Lord of the Rigs: Rosneft as a Mirror of Russia’s Evolution. Rice University Publications, Houston, 2007. http://bakerinstitute.org/programs/energy- forum/publications/docs/NOCs/Papers/NOC_Rosneft_Nina.pdf

Session 5: Fundamentals of the Russian and FSU oil industry

Description:

Major transformations, current challenges and future potential development of the Russian and FSU oil industry. Resource base, production and processing, institutional framework, major market players. The role of the state, pricing and taxation system. Access for the foreign companies. Major new upstream projects.

Required readings: • Russia 2014 – Energy Policies Beyond IEA Countries. IEA. Paris. 2014. • Global and Russian Energy Outlook Up To 2040. Ed. By A. Makarov, L. Grigoriev, T. Mitrova. ERI RAS. M.: 2014. Chapter 4. http://www.eriras.ru/files/forecast_2040.pdf

Recommended readings: • T. Gustafson. Russian Oil Industry at a Crossroads as Infrastructure Ages. The New York Times. December 4, 2012. http://www.nytimes.com/2012/12/05/business/global/russian-oil-industry-at-a- crossroads-as-infrastructure-ages.html?pagewanted=all&_r=0

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• Russian Energy in a Changing World: What is the Outlook for the Hydrocarbons Superpower? Ed. By J. Godzimirski. Ashgate Publishing Limited. 2013.

Session 6: Fundamentals of the Russian and FSU gas industry

Description: Major transformations, current challenges and future potential development of the Russian and FSU gas industry. Resource base, production, institutional framework, major market players. The role of the state, pricing and taxation system. Access for the foreign companies. Major new upstream and midstream projects.

Required readings: • Russia 2014 – Energy Policies Beyond IEA Countries. IEA. Paris. 2014. • Global and Russian Energy Outlook Up To 2040. Ed. By A. Makarov, L. Grigoriev, T. Mitrova. ERI RAS. M.: 2014. Chapter 4. http://www.eriras.ru/files/forecast_2040.pdf

Recommended readings: • The Russian Gas Matrix – How Markets Are Driving Change. Edited by J. Henderson and S. Pirani. Oxford University Press, 2014. http://www.oxfordenergy.org/shop/the-russian-gas-matrix-how- markets-are-driving-change/

Session 7: Priorities of the Russian domestic energy strategy

Description:

Main priorities of the Russian energy strategy. Current situation in the major energy industries (oil, gas, , electricity, including nuclear and renewables), main long-term targets and tools to achieve them. Pricing and market reforms.

Required readings: • World Energy Outlook 2011. IEA. Paris. 2011. Part B – Outlook for Russian Energy. Chapters 7, 8. • Energy Strategy of Russia for the Period up to 2030. Moscow. 2010. http://www.energystrategy.ru/projects/docs/ES-2030_(Eng).pdf

Recommended readings: • Global Trends in Oil and Gas Markets to 2025. LUKOIL. Moscow. 2013. http://www.lukoil.com/materials/doc/documents/Global_trends_to_2025.pdf • S. Pirani. Consumers as players in the Russian gas sector. 16.01.2013. http://www.oxfordenergy.org/2013/01/consumers-as-players-in-the-russian-gas-sector/ • J. Henderson. Competition for Customers in the Evolving Russian Gas Market. 17.01.2013. http://www.oxfordenergy.org/2013/01/competition-for-customers-in-the-evolving-russian-gas-market/ • Russian Energy in a Changing World: What is the Outlook for the Hydrocarbons Superpower? Ed. By J. Godzimirski. Ashgate Publishing Limited. 2013.

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COURSE OUTLINE

Session 8: Russian energy exports

Description:

Priorities and limitations of the Russian energy export strategy. External market niches and regulatory constraints. Global energy security and geopolitics. EU -Russia energy relationship – Third Package, antitrust investigations, EU-Russia Energy Dialogue (simulation), major contentious issues inside and outside EU. The Transit Dimension of EU Energy Security – Russian gas transit across , and Moldova. “Pipeline wars”. Chinese oil deal and gas negotiations.

Required readings: • World Energy Outlook 2011. IEA. Paris. 2011. Part B – Outlook for Russian Energy. Chapter 9. • Global And Russian Energy Outlook Up To 2040. Ed. By A. Makarov, L. Grigoriev, T. Mitrova. ERI RAS. M.: 2014. http://www.eriras.ru/files/forecast_2040.pdf

Recommended readings: • Russia`s oil export strategy: Two Markets, Two Faces. CIEP. January 2015. http://www.clingendaelenergy.com/inc/upload/files/CIEP_Paper_2015-01_Russia_web.pdf • J. Henderson, T.Mitrova. The Political and Commercial Dynamics of Russia’s Gas Export Strategy. 14.09.2015. http://www.oxfordenergy.org/2015/09/the-political-and-commercial-dynamics-of-- gas-export-strategy/ • The Russian Gas Matrix – How Markets Are Driving Change. Edited by J. Henderson and S. Pirani. Oxford University Press, 2014. http://www.oxfordenergy.org/shop/the-russian-gas-matrix-how- markets-are-driving-change/ • K. Yafimava. The EU Third Package for Gas and the Gas Target Model: major contentious issues inside and outside the EU. 16.04.2013. http://www.oxfordenergy.org/2013/04/the-eu-third-package-for- gas-and-the-gas-target-model-major-contentious-issues-inside-and-outside-the-eu-2/ • A. Grigas. The Gas Relationship between the Baltic States and Russia – politics and commercial realities. 10.10.12. http://www.oxfordenergy.org/2012/10/the-gas-relationship-between-the-baltic- states-and-russia-politics-and-commercial-realities/ • S.Pirani, J.Stern, K. Yafimava. The April 2010 Russo-Ukrainian gas agreement and its implications for Europe. 14.06.2010. http://www.oxfordenergy.org/2010/06/the-april-2010-russo-ukrainian-gas- agreement-and-its-implications-for-europe/ • K. Yafimava. The June 2010 Russian-Belarusian Gas Transit Dispute: a surprise that was to be expected. http://www.oxfordenergy.org/wpcms/wp-content/uploads/2010/11/NG43- TheJune2010RussianBelarusianGasTransitDisputeASurpriseThatWasToBeExpected-KatjaYafimava- 2010.pdf • L. Goodrich, M. Lanthemann. The Past Present and Future of Russian Energy Strategy. Stratfor. February 12, 2013. http://www.stratfor.com/weekly/past-present-and-future-russian-energy-strategy

Session 9: Energy sector of Caspian countries

Description:

Current situation in the major energy industries (oil, gas, coal, electricity, including nuclear and renewables), main long-term targets and tools to achieve them. Pricing and market reforms.

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COURSE OUTLINE

Required readings: • Crandall M. Energy, Economics and Politics in the Caspian Region: Dream and Reality - Westport, Connecticut ; London: Praeger Security International, 2006. • World Energy Outlook 2010. IEA. Paris. 2010. Part D – Outlook for Caspian Energy. Chapters 16, 17, 18.

Recommended readings: • Ahrend R., Tompson B. (2006). Realising the Oil Supply Potential of the CIS: The Impact of Institutions and Policies // OECD Working Paper. No ECO/WKP(2006)12. • Russian and CIS Gas Markets and their Impact on Europe // Editor: Simon Pirani. Published in the United States by Oxford University Press Inc., New York. Oxford Institute for Energy Studies. 2009. Chapter 12.

Session 10: Case study: Central Asian gas game

Description:

Regulation, geopolitics and economics of Central Asian gas supplies. Objective of the game is to propose the most efficient way to monetize stranded gas reserves and to negotiate this model with all the regional stakeholders.

Required readings: • S. Pirani. Central Asian and Caspian Gas Production and the Constraints on Export. 12.12.12. http://www.oxfordenergy.org/2012/12/central-asian-and-caspian-gas-production-and-the-constraints- on-export/

Recommended readings: • Abdelal R., Mitrova T. U.S.-Russia Relations and the Hydrocarbon Markets of Eurasia. Paper of the Working Group Working Group on the Future of U.S.-Russia Relations. 2013. http://us- russiafuture.org/publications/working-group-papers/us-russia-relations-and-the-hydrocarbon-markets- of-eurasia/ • Russian and CIS Gas Markets and their Impact on Europe // Editor: Simon Pirani. Published in the United States by Oxford University Press Inc., New York. Oxford Institute for Energy Studies. 2009. Chapter 12.

Session 11: Energy efficiency in Russia and FSU

Description:

Assessment of the energy saving potential in Russia and FSU. Main barriers for utilization of this potential. Governmental policies on energy efficiency promotion.

Required readings: • World Energy Outlook 2011. IEA. Paris. 2011. Part B – Outlook for Russian Energy. Chapters 7, 9. • World Energy Outlook 2010. IEA. Paris. 2010. Part D – Outlook for Caspian Energy. Chapters 16, 17, 18.

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Recommended readings: • I.Murray. Development of Energy Efficiency Indicators in Russia. 2011. http://www.iea.org/publications/freepublications/publication/Russia_En_Eff_Ind.pdf • A. Gusev. Energy Efficiency Policy in Russia: Scope for EU-Russia Cooperation. 2013. http://www.swp-berlin.org/fileadmin/contents/products/comments/2013C16_gsv.pdf • I Bashmakov. Resource of Energy Efficiency in Russia. CENEF. http://www.cenef.ru/file/Energy%20balances-final.pdf • S. Pirani. Elusive Potential: Consumption in the CIS and the Quest for Efficiency. 19.07.2011. http://www.oxfordenergy.org/2011/07/elusive-potential-natural-gas-consumption-in-the- cis-and-the-quest-for-efficiency/

Session 12: Energy sector of Ukraine

Description:

Current situation in the major energy industries (oil, gas, coal, electricity, including nuclear and renewables), main long-term targets and tools to achieve them. Pricing and market reforms.

Required readings: • Ukraine 2012, Energy Policies Beyond IEA Countries series. International Energy Agency. Paris. 2012. http://www.iea.org/publications/freepublications/publication/UK_Summaryplus.pdf

Recommended readings: • S. Pirani. Ukraine’s Gas Sector. 01.07.2007. http://www.oxfordenergy.org/2007/06/ukraine%e2%80%99s-gas-sector/ • in Ukraine. Deloitte & Touche. 2012. http://investukraine.com/wp- content/uploads/2012/06/Renewable-energy-in-Ukraine_230_230_WWW.pdf • Open Ukraine: Changing Course Towards a European Future. Chapter 5. http://transatlantic.sais- jhu.edu/publications/books/Open_Ukraine/05.Umbach.pdf

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