MINISTRY OF ENERGY OF THE RUSSIAN FEDERATION ENERGY BRIDGE «RUSSIA–ASIA PACIFIC» Deputy Minister of Energy of the Russian Federation K.V. Molodtsov Qatar 2015 THE ROLE OF ASIA-PACIFIC COUNTRIES IN THE WORLD ECONOMY Economy of APR: the biggest world market with high growth rate MINISTRY OF ENERGY 3 OF THE RUSSIAN FEDERATION The share of APR countries in the world GDP, 1995-2035 The share of APR countries in the world trade, 1995-2035 58 8 55 10 GDP growth APR the share of APR in the world GDP The share of APR in the world export Export trend from APR world GDP growth World export trend % y/y % y/y 50 8 51 6 % of global % of global 45 6 44 4 40 4 37 2 35 2 30 0 30 0 1995 2000 2005 2010 2015 2020 2025 2030 2035 1995 2000 2005 2010 2015 2020 2025 2030 2035 Source: World Bank, IEF estimates Source: World Bank, IEF estimates • APR countries (incl. India) accounts for more than 46% of the global • GDP growth was connected to the global trade growth (incl. inter- GDP, including the 2nd and 3rd economies of the world – China and country trade in APR) – in 2014 APR countries provide about 41% of Japan.. the world export. • Recent years GDP growth rate in APR countries was about 5-6% y/y • The rates of growth of the APR countries international trade was and was remarkably higher than economic growth in the world remarkably higher than global dynamics – in 2008-2015 it grew up by (+1-2 percentage point) and in other large regions. 1,4, whereas the other regions export increased only by 10%. • By 2035 the share of APR countries in the world economy will be • By 2035 APR countries will account for a half of the world trade. higher than 55%. APR is the largest energy consumer MINISTRY OF ENERGY 4 OF THE RUSSIAN FEDERATION Primary Energy Consumption in APR countries 20 APR the share of APR % 60 50.9% 51.7% 48.8% 50.1% rest of the world 46.5% Bln toe 43.9% 9.0 15 39.7% 8.5 45 7.9 34.4% 34.7% 7.2 32.5% 6.0 10 5.3 30 4.3 3.2 3.0 8.4 8.2 2.6 7.8 7.5 6.9 6.8 5 6.6 15 6.1 5.6 5.5 0 0 1990 1995 2000 2005 2010 2014 2020 2025 2030 2035 Source: IEF based on BP Statistical Review 2015, BP Energy Outlook 2035 • The share of APR countries in the global primary energy consumption is gradually increasing, and by 2014 it reached 46%. • In the longer term APR countries will provide major gain in the world energy consumption. • Up to 2035 APR will provide about 64% (!) of the world energy demand growth. • The main driver of the energy demand growth up to 2025 will be China, after 2025 – India. The economic needs of APR countries will play a critical role in the future development of the world hydrocarbons markets. MINISTRY OF ENERGY 5 OF THE RUSSIAN FEDERATION Outlook of the consumption of liquid hydrocarbons in APR Outlook of the consumption of natural gas in APR 40 % 40 1500 30 36.7 % 35.5% % The share of global consumption 33.8% 25.9% Bcm 30.6% 32.0% 11.1 10.9 24.7% 30 MMbbl/d 10.5 30 1125 The share of global consumption 23.4% 482 25 10.1 21.8% 433 Asia, 2.8 9.6 3.0 401 others 3.3 19.5% 103 20 3.7 8.2 20 750 368 20 4.4 5.8 7.0 101 167 Japan 99 4.9 313 Asia, 136 3.9 India 15.6 others 99 109 10 13.9 15.1 10 375 82 545 15 12.0 126 Japan 471 10.5 56 India 387 China 161 China 295 0 0 0 10 2014 2020 2025 2030 2035 2014 2020 2025 2030 2035 Actual Forecast Actual Forecast Source: IEF based on BP Statistical Review 2015 Source: IEF based on World Energy Outlook 2014 Outlook of the natural gas import by APR 600 60 % • APR countries will be gradually increasing the share in the Bcm 52.9% global consumption of liquid hydrocarbons and natural gas. 50.3% 50.0 400 The share of APR 20.0 50 • By 2025 about 50% of natural gas export will supply to APR 46.0% 153.0 countries, primarily to China, which can increase imports 12.0 151.0 4 times. others 75.0 200 44.0 40 Japan 171.7 and S. Korea 213.0 171.0 India 18.0 China 49.1 0 30 2014 2025 2035 Actual Forecast Source: IEF based on World Energy Outlook 2014 Заголовок RUSSIA IS THE KEY PLAYER ON THE WORLD ENERGY MARKET Russia is the largest player in the world energy MINISTRY OF ENERGY 7 OF THE RUSSIAN FEDERATION The Russian share in 2015 PRODUCTION RESERVES 1. Russia 1. Russia 1.Venesuela ND 2. Saudi Arabia 2. Saudi Arabia TH 2. Saudi Arabia 12.0% 3. United States 3. United States 6.1% 3. Canada 1 PLACE 4. China 4. China 6 PLACE 4.Iran OIL IN THE 5. Canada 5. Canada OIL IN THE 5. Iraq PRODUCTION WORLD RESERVES WORLD 6. Russia 1. United States 1. United States 1. Iran ND 2. Russia 2. Russia ND 2. Russia 3. Iran 3. Iran 3. Qatar 17.7% PLACE 4. Qatar 4. Qatar 17.4% PLACE 4. Turkmenistan GAS 2 GAS 2 IN THE 5. Canada 5. Canada IN THE 5. United States PRODUCTION WORLD RESERVES WORLD 1. China 1. China 1. United States TH 2. United States 2. United States ND 2. Russia 3. India 3. India 3. China 4.5% PLACE 4. Australia 4. Australia 17.6% PLACE 4. Australia COAL 6 COAL 2 IN THE 5. Indonesia 5. Indonesia IN THE 5. India PRODUCTION WORLD 6. Russia 6. Russia RESERVES WORLD 1. China 1. China 1. China TH 2. United States 2. United States TH 2. United States 3. Japan 3. Japan 3. Japan 4.4% PLACE 4. India 4. India 4.2% PLACE 4. India ELECTRICITY 5 INSTALLED 5 IN THE 5. Russia 5. Russia IN THE 5. Russia GENERATION WORLD CAPACITY (2012) WORLD Source: Estimated based on BP Statistical Review 2015, OPEC, EIA, IEA, CDU TEK Eastern Siberia and Far East are the regions with high natural resources potential MINISTRY OF ENERGY 8 OF THE RUSSIAN FEDERATION Structure of oil reserves (ABC1+C2) in Eastern Siberia Structure of gas reserves (ABC1+C2) in Eastern Siberia and Far East, 2014, bln t and Far East, 2014, TCM 1.9 0.01 4.52 0.02 Krasnoyarsk Chukotka AO Irkutsk Kamchatka Krai Krai Oblast 0.9 0.05 2.91 0.05 Irkutsk Sakhalin Yakutia Sakhalin Oblast 3.86 Oblast Republic 11.22 Oblast 0.6 1.88 0.4 Krasnoyarsk 1.84 Yakutia Sea of Okhotsk Sea of Okhotsk bln t Republic Krai TCM Source: Ministry of Natural Resources and Environment of the Russian Federation Source: Ministry of Natural Resources and Environment of the Russian Federation • 11,7 bln t – prospective and predicted oil resources • 41,8 TCM – prospective and predicted gas resources • 3,9 bln t – proved, probable and possible reserves (ABC1+C2) • 11,2 TCM – proved gas reserves • More than 13% of the Russian reserves (ABC1+C2) • 16,2% of the Russian gas reserves (ABC1+C2) Oil and gas reserves of Eastern Siberia and Far East nowadays are quite sufficient for extensive hydrocarbons production development Prospects for the development of gas sector in Eastern Siberia and Far East MINISTRY OF ENERGY 9 OF THE RUSSIAN FEDERATION Gas production in Eastern Siberia and Far East will grow The share of APR countries in Russian gas export will rise 1000 Far East % 20 45 Far East and % APR share 41.0% Eastern Siberia Eastern Siberia 38.0% bcm 860 Others share 16 30 720 12 23.0% LNG share 23.0% 19.0% 580 8 15 17.0% 7.0% 440 4 300 0 0 2010 2011 2012 2013 2014 2015 2020 2025 2030 2035 2014 2020 2025 2035 FORECAST Source: Ministry of Energy of the Russian Federation Source: Ministry of Energy of the Russian Federation • The main growth of gas production in Eastern Siberia and Far East will • It is estimated that by 2020 the share of APR in Russian gas export will be observed after 2020. grow up from 7% to 19% followed by an increase to 41% by 2035. • It is expected that the share of Eastern Siberia and Far East in total gas • The share of LNG in gas export is to be raised from 7% to 17% with production of the Russian Federation will reach 15% by 2035. the subsequent growth till 23% by 2035. Заголовок THE STATE ROLE IN SUPPORTING OF OIL AND GAS PROJECTS IN EASTERN SIBERIA AND FAR EAST Government supports the development of gas fields in Eastern Siberia and Far East MINISTRY OF ENERGY 11 OF THE RUSSIAN FEDERATION TYPE OF FIELDS AND PROJECT PREFERENCE Projects on the territory: Preferential royalty (10% of standard tax rate) on the period from 1 July • of Irkutsk Oblast 2014 till 31 December 2033 • of Krasnoyarsk Krai or the Far Eastern Federal District NATURAL • or in Sea of Okhotsk GAS OFFSHORE TYPE OF FIELDS AND PROJECT PREFERENCE PROJECTS IN 50% and more of the area in the Sea of Japan Preferential royalty (15% of the mined materials cost) 7 years from EASTERN ARCTIC and southern part of the Sea of Okhotsk the start of production or till 31 March 2032 AND FAR EAST 50% and more of the area in northern part Preferential royalty (10% of the mined materials cost) 10 years from of the Sea of Okhotsk the start of production or till 31 March 2037 50% and more of the area in the Kara Sea Preferential royalty (5% of the mined materials cost) 15 years from and Eastern Arctic (the Laptev Sea, the East the start of production or till 31 March 2042 Siberian Sea, the Chukchee Sea, the Bering Sea) Cooperation of Russian & Asia-Pacific energy companies MINISTRY OF ENERGY 12 OF THE RUSSIAN FEDERATION Joint projects in Russia CNPC JV «Vostok Energy» with «Rosneft» produce oil in Irkutsk oblast, 20% in Yamal LNG Venineft (25,1%) — exploration, Sinopec Udmurtneft (49%) Sakhalin-1 (20%) ONGC 14 blocks in Tomsk oblast (77, 69, 80, 70-1, 70-1С, 70-2, 70-2 ЗМ, 70-3, 70-3ЮМ, 70-3М, 85-1, 85-1Т, 86, 86-В) – by Imperial Energy JAPEX, Marubeni и др.