chapter  3
16 Pages

Exporting from Russia: the oil and gas industry

Strategies in oil and gas on international markets The global integrated oil and gas sector is basically composed of companies engaged in exploration for and production, refining, distribution and retailing of oil and gas. At the periphery it also includes specialised work in chemicals. In ‘petrospeak’ the exploration and production activities are termed ‘upstream’, whereas the refining, distribution and retailing are ‘downstream’. The sector, as a whole, experienced fluctuating growth in 2003-2007. It generated total worldwide revenues of US$3.6 trillion in 2007, representing a CAGR of 16.7 per cent for 2003-2007.1

Because oil and gas are such enormous revenue sources, their production is often tightly controlled by the governments of the countries holding reserves. Many countries – Saudi Arabia, Abu Dhabi, Venezuela, Norway and Mexico are but a few examples – have completely nationalised oil and gas sectors. Other countries, such as the USA, the UK and France, are completely private. Some countries have mixtures. That is the case in Russia, where state-owned and private giants co-habit, sometimes on uneasy terms.