An energy bridge between East and West
The resurgence of oil, the increasing numbers of gas and the development perspectives for 2020 show that Russia points on energy to sustain its economy, as it emerged also from the statements of the main industry players over the last Eurasian Forum of Verona

We are trying hard to understand one major thing: whether the love between Russia (or Gazprom, limiting ourselves to energy alone) and Europe will remain constant, or whether it will die, as did poor Romeo and Juliet, under the blows of the sanctions and the arrival of American shale gas. We therefore also wish to know whether Russia will change its energy route, by moving to the east and leaving the Old Continent high and dry.

Russian energy partners and prospects

From 2005-2015 global gas consumption grew by 25%, and if the LNG quote is only 10% of the market, LNG tripled" - Mikhelson, Novatek

Albeit not explicitly, these issues were also discussed in Verona, at the 5th Eurasian Forum. The Chairman and CEO of Rosneft, Igor Sechin, wanted to start the Forum in the early morning, while other key energy players held discussions in the afternoon. Sechin began his speech by recalling that "Russia is, by its very structure, a bridge between the east and west", and that both opportunities must be taken advantage of. But the numbers speak for themselves. "Russian companies are currently very active in the markets of China, India, Japan, Indonesia, Vietnam and many other countries, and Asian countries have already become the main investors in the Russian oil and gas industry", said Sechin. "Russian oil supplies to Asian countries since 2000 have increased over forty-fold." However, to calm spirits a bit, Rosneft’s CEO wanted to emphasize that "the development of our links with partners in Asia and the Pacific is not competitive. Rather, it opens up new opportunities for our European colleagues. Rosneft alone could propose projects worth over $100 billion to European partners for the development of connections along Russia-Europe and Russia-Asia Pacific energy bridges". However, it seems that oil’s darks days are ending. Sechin also explained that, in the next year and a half, the period of excess supply on the market is expected to end, and that the start of a normalization process will occur, in which "oil prices will exceed $55 per barrel."

The global gas market will, in theory, grow by 30% in the next 15 years, the estimate predicts 12% increase in Europe's gas consumption from Gazprom's pipelines, while in Africa 59% growth is expected, 56% in Asia and the Pacific, and 45% in the Middle East", according to Leonid Mikhelson, of Novatek

The steady growth of gas

Leonid Mikhelson, the CEO and Chairman of Novatek, spoke instead of the gas market. "From 2005 to 2015 global gas consumption grew by 25% and, while the share of LNG only holds 10% of the market, LNG has grown three times as much ", he noted. In this period, however "the major producer, Russia, stagnated, while the U.S. increased its production by 50%, Australia by 70% and Qatar by almost 300%." Despite a certain slowdown in Europe, the global gas market will, in theory, grow by 30% in the next 15 years, predicts the Chairmant of the Russia’s top independent operator. His estimate forecasts a 12% increase in Europe’s gas consumption from Gazprom’s pipelines, while in Africa 59% growth is expected, 56% in Asia and the Pacific, and 45% in the Middle East. In fact, the arrival of American shale gas in the Old Continent would only lead to healthy competition and would remove the issue of opponents of Gazprom, according to which the Russian giant would be able to use the weapon of having more European suppliers for political purposes, as Vladimir Drebentsov, Vice Chairman of BP Russia believes. Moreover, with a view to the next 15 years, Gazprom is expected to easily maintain its 30% share of the European market, which is still the main market for the Russian giant. Exactly as Romano Prodi stated, "Russia needs Europe, as much as Europe needs Russia."

Future energy scenarios

What if we were to look even further ahead, to 2040? According to Sechin, "by 2040, the demand could grow by at least 40 million barrels per day, with a demand for resources that could exceed four times Saudi Arabia’s current extraction." Rosneft is ready to quench the world economy’s thirst. In 10 years, from 2005 to 2015, the company increased its share of global oil extraction from 1.9% to 4.9% and, with the recent acquisition of Bashneft, its share has reached 5.4% with a current European share of approximately 20%. From Moscow, Gazprom’s CEO Alexey Miller emphasized that during the days of the Forum the Russian company had broken a record: "on October 21, we supplied 590 million cubic meters of gas to European consumers." But what about renewable energy? Rosneft has such low oil extraction costs that spending time and money on "funding whims" as they say in these parts, becomes a luxury. "If we want to be the sponsors, we will fulfil the role in another way," is what they think here. Even BP is still not developing alternative energy projects in Russia. However, in addition to these statements, there is, at least, an interesting fact: precisely during the Forum, Russian Energy Minister Alexander Novak was opening a solar farm in Bashkortostan, with a capacity of 15MW: the largest in Russia.