Growth of Oil Production in Russia May Not Be Stable Tendency

The significant growth of oil production may not be considered an absolutely stable tendency. Such is the opinion of Igor Yusufov, the Minister of Energy of Russia, he expressed at a meeting on the problems of the country's oil industry. The minister believes the growth is conditioned primarily by the foreign markets of energy resources and the favourable internal economic factors. Mr. Yusufov noted serious changes that lately occurred in Russia's oil industry. The share of the government in the ownership of petroleum companies has gone down to a little over 30% while the share of small companies in the overall structure of the industry has grown. Changes have occurred as concerns both internal and external markets, extensive enough wholesale and retail networks created. Legislation has also changed. Investment-wise, oil companies have become far more active. Oil transportation structure has been significantly extended with the completion of such large pipeline systems as that of the Caspian Pipeline Consortium, the Sulhodolskaya-Rodionovskaya pipeline and the first phase of the Baltic Pipeline System. Oil-refining industry has undergone significant modernisation, which resulted in a higher quality of petroleum products. A record growth of the production of oil, reaching 42.8 million tonnes, has been achieved over the past two years.

The minister pointed out the leading role of oil industry in Russia's economy. It produces over 33% of all primary energy resources, its share in the country's Total Internal Product amounting to about 10%. Oil companies are a large source of tax revenue and foreign currency reserves, having generated, for instance, $12 milliard tax money and $27 milliard inflow of foreign currencies over the first 9 months of the year 2001.