Russian oil and gas revenues face collapse


Our country will face another difficult test. It is no secret that the Russian budget depends on the revenues of the oil and gas sector. But starting this year, a serious reduction in foreign exchange earnings based on hydrocarbon exports is expected. Is everything so critical, and what will the forced “pulling out of the oil and gas needle” lead to?


Oil


Today, Russia is one of the largest oil exporters in the world. High prices for "black gold" in the "zero" became the key to the so-called "Putin stability" in the "fat years" when the dollar was worth 30 and the euro - 40. However, expensive oil did not greatly help the country's economic development, since the excess profit from it sales are both withdrawn and continue to be withdrawn to reserves, according to the budget rule of “Kudrin’s scissors”.

Currently, there is a negative trend in oil prices. Last year, budget revenues from oil exports fell by 5,8%, amounting to only 111,5 billion dollars. The reason for this is the rapid increase in the production and supply of American oil to the world market. Due to its aggressive external policy, The United States ousted Iran, Venezuela and Libya from it, occupying their share.

An additional negative factor is the coronavirus epidemic in China, which severely hit the air transportation market, domestic trade, and the movement of passengers and goods inside the PRC. Due to an oversupply, the price of hydrocarbons decreases even faster.

Some experts believe that in 2020 the cost of oil will fluctuate between 55-65 dollars per barrel, and the Russian budget revenues from its exports will decrease.

Gas


The situation with “blue fuel” is even worse, which is due to several factors at once.

At firstthreatening Kiev with a "gas war", Gazprom pumped record reserves into European underground storages. On New Year's Eve, the monopolist capitulated ingloriously, signing a new transit agreement on conditions that are not very favorable. However, by his actions he created an oversupply in the EU.

Secondly, the winter of 2019-2020 was abnormally warm. Plus temperatures are held even in the traditionally harsh Russia in this regard. Because of this, Europeans do not have to turn to the accumulated gas reserves in the underground gas storage facilities.

Thirdly, in Southern Europe, Gazprom has a competitor in the person of Azerbaijan, which pumps fuel through the TAP and TANAP systems.

FourthlyIn addition to the state corporation, the private NOVATEK began to operate in the EU. Russian LNG from Yamal was supposed to go to Asia, but due to the insufficiently developed infrastructure of the NSR, it has to be dumped on the European market, creating competition for Gazprom.

Together, this means that gas export profits will begin to decline. Its average cost per thousand cubic meters is expected at the level of 140-150 dollars per thousand cubic meters, but it can be reduced at times to 100 dollars. According to some estimates, Russia's oil and gas revenues in 2020 will decrease by 7-10%, which is very serious. The consequences are not difficult to predict. Gazprom has already warned the population that it is time to prepare for the end of the period of low gas prices in the country.

It is easy to guess where the government will take additional funds to compensate for lost oil and gas revenues. The new head of the Cabinet, Mikhail Mishustin, a former tax official, intends to create a certain register of Russians, where under the magnifying glass the ratio of expenses to declared income will be studied. Obviously, the goal is to bring the “gray income” of the population to light. It is possible that in the future the functionality of this registry may be expanded. The self-employed tax experiment is a clear indication of the government’s thinking.
Used photos: gazprom.com
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  1. Afinogen Offline
    Afinogen (Afinogen) 31 January 2020 10: 56
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    NOVATEK. Russian LNG from Yamal was supposed to go to Asia, but due to the insufficiently developed infrastructure of the NSR, it has to be dumped on the European market, creating competition for Gazprom.

    Here it is not clear. Is that liquefied gas brought from Yamal, competitive with pipe ??? It turns out, at one price or lower, once it competes.
  2. steelmaker Offline
    steelmaker 31 January 2020 11: 15
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    Oil is the most important article of Russian exports, making up, according to data for 2009, 33% of exports in monetary terms (together with petroleum products - 49%). In addition, prices for the third main export component, natural gas, substantially depend on the level of prices for oil and oil products.

    In 2016, 547,497 million tons of oil with gas condensate were produced in Russia (+ 2,5% by 2015), primary oil refining amounted to 279,365 million tons per year (-1,2% by 2015). At the end of 2016, Russia ranked first in the world in terms of oil production, ahead of Saudi Arabia and the United States.
    MOSCOW, Feb 6 - PRIME. Russia's income from oil exports in 2018 increased by 38,2% compared with the previous year and amounted to 129,05 billion dollars, according to the Federal Customs Service (FCS). Over 12 months, total oil exports grew by 2,9% to 260,2 million tons. Feb 6 2019 year

    The USSR sold - exported no more than 10% of what it produced and mined! The USA, by the way, now also sells no more than 10% of what it produces and produces! So compare what Putin is doing with his government. I hope SOME educational level will allow this to be done. Or provide your numbers!
    1. 123 Online
      123 (123) 31 January 2020 12: 36
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      The USSR sold - exported no more than 10% of what it produced and mined! The USA, by the way, now also sells no more than 10% of what it produces and produces! So compare what Putin is doing with his government. I hope SOME educational level will allow this to be done. Or provide your numbers!

      Digging now there is no desire, We will use yours. What do you think, if the United States exports 10% of the oil produced, then how to perceive

      Last year, budget revenues from oil exports fell by 5,8%, amounting to only 111,5 billion dollars. The reason for this is the rapid increase in the production and supply of American oil to the world market.

      The level of production in Russia and the United States is approximately comparable. Why does the author scare us with these 10%?
  3. 123 Online
    123 (123) 31 January 2020 11: 54
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    Old songs about the main thing. They will squeeze us out from everywhere, we will all be defeated, there will be no money, so three skins will begin to tear people. sad

    However, expensive oil did not greatly help the country's economic development, since excess profits from its sale were withdrawn and continue to be withdrawn to reserves, according to the budget rule of “Kudrin’s scissors”.

    If I’m not mistaken, they plan to open up the "little money" and direct the money to develop the economy, and, finally, to finance national projects. For us, for example, it still looks something like this:

    http://national-projects.ugra-news.ru/

    But since this information does not coincide with the author’s point of view on the development of events, it is not worth considering it.

    Currently, there is a negative trend in oil prices. Last year, budget revenues from oil exports fell by 5,8%, amounting to only 111,5 billion dollars. The reason for this is the rapid increase in the production and supply of American oil to the world market. Thanks to its aggressive foreign policy, the United States ousted Iran, Venezuela and Libya from it, occupying their share.

    Something I doubt is such a causal relationship. What “market” methods the United States affects Iran, Libya and Venezuela is not a secret, but thank God, Russia is not Libya, and such methods do not work with us.

    Some experts believe that in 2020 the cost of oil will fluctuate between 55-65 dollars per barrel, and the Russian budget revenues from its exports will decrease.

    The author, by chance, does not remind the payback threshold of oil production in the United States? But we still expect a victorious procession of American oil ...... Will they work at a loss?

    An additional negative factor is the coronavirus epidemic in China, which severely hit the market for air transportation, domestic trade and the movement of passengers and goods inside China. Due to an oversupply, the price of hydrocarbons decreases even faster.

    Do you think the epidemic will drag on for years?

    First, by threatening Kiev with a “gas war”, Gazprom pumped record reserves into European underground storage facilities. On New Year's Eve, the monopolist capitulated ingloriously, signing a new transit agreement on conditions that are not very favorable. However, by his actions he created an oversupply in the EU.

    I’ll miss about Kiev, this is not the case, the author’s next attempt to put pressure on a sore spot. Do you think gas pumped into storage will not be sold?

    Secondly, the winter of 2019-2020 was abnormally warm. Plus temperatures are held even in the traditionally harsh Russia in this regard. Because of this, Europeans do not have to turn to the accumulated gas reserves in the underground gas storage facilities.

    This factor affects not only Russia, something I have not heard lamentations about the budget of Norway, for example.

    Thirdly, in Southern Europe, Gazprom has a competitor in the person of Azerbaijan, which pumps fuel through the TAP and TANAP systems.

    C'mon, is that a competitor? Look at the volumes.

    Fourth, in addition to the state corporation, the private NOVATEK began to operate in the EU. Russian LNG from Yamal was supposed to go to Asia, but due to the insufficiently developed infrastructure of the NSR, it has to be dumped on the European market, creating competition for Gazprom.

    Why was he supposed to go to Asia? He must go where profitable. And he is more likely to compete with the American, Qatari, etc. LNG

    It is easy to guess where the government will take additional funds to compensate for lost oil and gas revenues. The new head of the Cabinet, Mikhail Mishustin, a former tax official, intends to create a certain register of Russians, where under the magnifying glass the ratio of expenses to declared income will be studied. Obviously, the goal is to bring the “gray income” of the population to light. It is possible that in the future the functionality of this registry may be expanded. The self-employed tax experiment is a clear indication of the government’s thinking.

    The author considers the withdrawal of the economy from the "gray zone" evil? belay This is an increase in budget revenues, and the fight against corruption, and in the long term an increase in pension contributions. I know cases when the “white” salary is 20% of the real. By the way, these measures will show more real GDP.
  4. gorenina91 Offline
    gorenina91 (Irina) 31 January 2020 13: 42
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    - Personally, I have repeatedly covered this topic for many years in many of my comments ... - and the author of this article has practically no discrepancies with my opinions ... - A correspondent from me to the author of this article ... and plus from me. ..
    - Yes, that’s how it is ...
    - Well, I repeat one more time ...
    - The peak surge ... - Gazprom’s more or less “successful period” has passed completely and irrevocably ... - Yes, even the data in numbers are absolutely not needed ... - All this “digital window dressing" just doesn’t cost anything today .. a bluff ...
    - Yes, and this period of Gazprom can be called successful only conditionally ... - All of the so-called "financial and material successes" of Gazprom were advanced at the subsequent disastrous Gazprom period, which has already begun today ... - And today, all Gazprom’s activities are in absolute failure. ..:
    - A pile of expensive gas pipelines - that on land, that on the bottom of the seas (some are still unfinished) .. that will never pay off ... - these are the results of Gazprom’s illiterate economic policy ... - Colossal material fatal losses !!!
    - And what to do with them today ??? - Moreover ...- today Gazprom can very easily self-destruct ... ... and before that it will "scoop out the entire cash desk" (as far as foreign co-owners-accomplices allow it) and "dissolve" into oblivion ... -And all your debts, and obligations (criminal enslaving for Russia - treaties with Turkey, with China and with Western Europe) Gazprom will hang on many generations of Russian taxpayers ...
    - Around the same time, our entire former Russian government, headed by the “ingenious Medvedev”, has also “dissolved” ... - who now and what can I ask ??? - Awww ....
    - But that is not all ... - Having secured such Gazprom’s impunity, today NOVATEK is already "wielding" with might and main. - As long as this NOVATEK still has a Gazprom cover and so far they have not paid much attention to the already completed failure of NOVATEK ... - everything is still focused on Gazprom’s affairs ... - But as soon as Gazprom dissolves. ., then ... then ... then ... then ...
    - And NOVATEK is a swindler who is much better than Gazprom ... - Gazprom is not good for it in this matter ...
    1. Vladimir Pimanov (Vladimir) 3 February 2020 15: 49
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      ... and so far, NOVATEK’s failed accomplishments have not yet received much attention ...

      And what has Novatek done? Are there facts, or just to blurt out? Novatek, meanwhile, provides a stable profit, the company's shares are growing along with the confidence of Western investors, in addition, the company is not under sanctions, it freely trades LNG on world markets, and plans to build two more plants. You will not say anything - "things are disastrous ..."
      1. gorenina91 Offline
        gorenina91 (Irina) 3 February 2020 16: 10
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        Are there facts, or just to blurt out?

        “Are you me?” Any clarifications on my part only after an apology ...
  5. Sapsan136 Offline
    Sapsan136 (Sapsan136) 31 January 2020 14: 19
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    There is no silver lining. Look, they imposed sanctions and farmers in the Russian Federation sighed ... Domestic duck, rabbit, etc., which had not happened before, instead of rotten American chicken, began to appear in stores ... Maybe now the industry in the Russian Federation will breathe from a long disregard for itself .. And those who yelled that the industry of the Russian Federation is not needed and everything needs to be bought abroad will go to court and to the cutting area, where they have the right place!
  6. Alexander Bushkovsky (Alexander) 31 January 2020 15: 24
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    GUARD!!! Everything is gone, the plaster is removed, the client leaves! How "domestic" liberalism wants Putin's Russia to be not just bad, but just awful.
    1. Oyo Sarkazmi Offline
      Oyo Sarkazmi (Oyo Sarkazmi) 1 February 2020 18: 49
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      Not domestic. These are the slaves of Biden, from Bidenland they rubbed their mriy to us. Since the leaders of the Ukrokh people, in spite of the arrogant neighbor, buy neighboring gas for 300, instead of 180. And the lackeys rub their hands - revenge will be expensive !!!
  7. master3 Offline
    master3 (Vitali) 31 January 2020 18: 12
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    ... continue to be withdrawn to reserves.

    - Does everyone know where these reserves lie? Surnames to list?
  8. Marzhecki Offline
    Marzhecki (Sergei) 1 February 2020 08: 30
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    Quote: Alexander Bushkovsky
    GUARD!!! Everything is gone, the plaster is removed, the client leaves! How "domestic" liberalism wants Putin's Russia to be not just bad, but just awful.

    In fact, the situation in the country is the result of the activities of the liberal government. Moreover, President Putin himself is a liberal. A word to his spokesman Peskov:

    "Russian President Vladimir Putin is an absolute liberal by nature, not a conservative," said presidential spokesman Dmitry Peskov.
    “You know, enemies - primarily abroad, but also some enemies within Russia - believe that Putin is more likely a conservative and such a statesman who is alien to the word“ freedom. ”But Putin is an absolute liberal by nature, and a much larger liberal rather than called liberals who call themselves “the opposition,” Peskov said in an interview with the Mir television channel, saying the president is “absolutely liberal in his economic approaches, social policy, and so on.

    https://rg.ru/2016/12/21/peskov-putin-gorazdo-bolshij-liberal-nezheli-nazyvnye-liberaly.html

    It is not clear who you call liberals, obviously, laying a negative meaning in this word.
    1. 123 Online
      123 (123) 2 February 2020 09: 58
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      It is not clear who you call liberals, obviously, laying a negative meaning in this word.

      The fact is that many call themselves liberals, in fact, not being such. The very concept of liberalism is vulgarized to the extreme. These gentlemen, who consider themselves opposition and liberals, come under the definition of "liberals."
  9. Marzhecki Offline
    Marzhecki (Sergei) 1 February 2020 08: 31
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    Quote: 123
    The author considers the withdrawal of the economy from the "gray zone" evil? This is an increase in budget revenues, and the fight against corruption, and in the long term an increase in pension contributions.

    Pay taxes and sleep in the trash. smile In our realities, it will be something like this. wink
    1. Oyo Sarkazmi Offline
      Oyo Sarkazmi (Oyo Sarkazmi) 1 February 2020 18: 54
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      In the USA it’s worse. I gave a relative a loan of 5 thousand dollars - your relative is required to pay tax on them. He returned these 5 thousand to you - you must pay tax on them. They didn’t pay, if this operation becomes known to the Ministry of Finance, you will spend 10 years in prison.
      Necha GDP spoil illegal financial transactions.
    2. 123 Online
      123 (123) 2 February 2020 10: 04
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      Pay taxes and sleep in the trash. In our realities, it will be something like this.

      Come on laughing Somehow I get it, and sleep at home. What results in the complete non-obligation to pay taxes, you can look at the example of Ukraine. If you urge you not to pay taxes, then what is the moral basis for your claims to the state? Live on your own. Are you an anarchist?
      PS For some reason, I do not see an alert about your comments.
  10. boriz Offline
    boriz (boriz) 4 February 2020 01: 33
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    It is strange.
    The author is aware of the existence of “Kudrin’s scissors,” but he is saddened by the decline in oil prices to $ 55. After all, scissors work from $ 40. The rest is to help the starving IMF. The topic of oil prices should be of great concern to us in two cases:
    - when it drops below $ 40, but far from that, and the US will keep it in every way. For their shale oil, 50 is a disaster;
    - if we get rid of the IMF. But then we will have enough money anyway. Other tributes are in abundance, without scissors.
    And as it is driven out of the Venezuelan market, Rosneft enters the United States with its heavy oil. The United States exports light oil, but its refineries are sharpened to heavy and it is completely unrealistic to reconfigure them. Replacing one distillation column (not the entire plant) costs $ 500 million. I myself was surprised when I heard. And there are only three sources of heavy oil: Venezuela, the Russian Federation and Iran. Guess from 1 time, where does the US get it from? Rosneft's US sales grew 3,1 times over the past year. It got to the point that they started buying fuel oil from Rosneft. There were problems with him. This is fuel for ships (ships), and Greta Tunberg did not order to heat fuel oil and its sales fell. And here, by the way, there were sanctions against Venezuela. Our oil is mixed with fuel oil and it turns out what is needed for 12 refineries on the US coast of the Gulf of Mexico. Bingo! And Rosneft sends Venezuelan oil to its refinery in India.
    About gas - too lazy again to list the closure of coal generation, petroleum products, nuclear power plants, etc. Greta steers.
    Here is the information from 09.09.2019/XNUMX/XNUMX. Interfax:
    “In the first half of 2019, production in the country (Netherlands) decreased to about 18,7 billion cubic meters compared to 20,3 billion cubic meters in the same period in 2018. Last year, production amounted to 38,6 billion cubic meters, which is 12 % lower than the indicator for 2017 (43,9 billion cubic meters). For 2019, production is projected at almost 35 billion cubic meters. " It is about the Groningen deposit. It was decided to close it completely in 2023. and do not try to replace the prey on the little things. For it is not profitable.
    Once again: in 2017. - 43,9 billion cubic meters, in 2023. - 0. Already in 2018. The Netherlands began to partially import gas.
    The whole problem is in the beginning of earthquakes (from the subsidence of the bottom). They have already reached 4 points. 5 points will wash the dams and flood everything below sea level. And this is a lot, people live there, production, agriculture, infrastructure. Depending on the seismic data, they may close earlier. They don’t joke about such things.
    Denmark also reduces production, the bottom of the sea is lowering, it is necessary to increase the height of the mining platforms, this is not a quick matter.
    Azerbaijan is not able to pump miserable 16 billion cubic meters into TAP - TANAP, of which Turkey neatly leaves 6 billion to itself. There is the question of injecting Russian gas there in order to fulfill obligations to Europe.
    The rest is minor temporary troubles.
    NOVATEK has foreign shareholders. They buy gas directly on the Yamal Peninsula, and LNG has a peculiarity: before it is unloaded, it can change its owner 5-7 times. In the USSR, this was called speculation, now - commerce. Gas shipped to Yamal comes to Poland as American, to the delight of Sergei.
    Algeria will not increase supplies to Europe; it sends all volumes, in addition to deliveries under long-term contracts, to Asia.
    By the way, the main (in terms of volume) positions that the high-tech USA impose on China are oil, gas, wood, soy, pork, chicken. And no one there soared.
  11. Vladimir Pimanov (Vladimir) 4 February 2020 15: 04
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    Quote: gorenina91
    Are there facts, or just to blurt out?

    “Are you me?” Any clarifications on my part only after an apology ...

    What other apologies? I personally did not offend you in any way. And if some kind of speech figure touched you, then get used to it - this is the Internet and it is not customary to breed snot here. The explanations on your part are not particularly interesting to me either. Are you a great expert in the oil and gas industry? I doubt it. Or deeply immersed in Novatek? I doubt it even more. So why these empty talk ...
  12. Pavel Fedorov Offline
    Pavel Fedorov (Pavel Fedorov) 6 February 2020 07: 47
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    And then something fell over to the people: they will still raise their retirement age, prices for everything will rise! Well, all the same for the people!
    Enough for the kids in the “landon” of shekels, what are you afraid of?