Russia has been producing large volumes of oil since the
1890s, progressively from the Caucasus region, from sedimentary basins
west of the Urals and from West Siberia. It reached peak output in 1987,
after which decline was driven by lack of investment associated with
lower prices and the ensuing Soviet Union break-up.
Production has been recovering since 1999 and a new, albeit slightly
reduced, peak was forecast here to occur in 2008/2009, which seems to be
materialising. The start of offshore production from the Caspian Sea and
off Sakhalin Island will allow a few years at plateau before slow
Russia has huge gas reserves. Global demand is driving investment and
output is due to grow from all prospective on and offshore areas
including Sakhalin and the Arctic North. However a global surplus of
LNG, recognised in 2009, may delay many of these projects so that
production hardly increases until 2013/2014.
oil consumption collapsed after the break-up of the Soviet Union,
especially as a result of the partial destruction of its energy
intensive and wasteful heavy industries. It is recovered in the
transport sector and some growth is forecast up to 2018 by which time
exports will be on a long term downward trend.
Meanwhile gas consumption is growing rapidly for both industrial and
residential use. Although a large number of countries, especially in
Europe, have been demanding more gas from Russia, exports have begun to
decline due to pricing issues and project delays. Exports may only pick
up again from 2016.