The Strategic Implications of Russia’s Eastern Oil Resources: OIES paper: WPM 41

Russian oil exports have historically been focused on western markets but the rapid growth of the Asia-Pacific economies over the past two decades has led to a re-focusing of Russia’s strategic and energy interests. The oil and gas resources of East Siberia and the Far East of Russia have long been known about and a number of factors have now led the Russian Administration to increase the priority of their development. Dr. Henderson’s paper examines the renewed interest in investment in the oil resources in East Siberia and the Far East. This paper examines the strategic importance of the East Siberia–Pacific Ocean pipeline and the ability of Russia to increase production from its eastern regions to fill the full capacity of the line. It examines the plans of all the companies involved in field development looking in detail at the specific assets that will provide the bulk of Russia’s oil exports to eastern markets. The paper also discusses the fiscal incentives that the Russian State is starting to provide in order to encourage companies to invest, and provides estimates by company of the potential amount and timing of oil production that could possibly emerge as a result. It also analyses the potential for Russia’s eastern territories to produce sufficient oil to balance the gradual decline expected in the west of the country, and explores the opportunity for Russian exports to make a greater contribution to the crude mix supplying demand in the Asia-Pacific region