Russian chill cast doubts over new oil investment

A frostier climate for private investors in Russia, holder of the world’s largest natural gas reserves, is likely to stop oil firms from pressing ahead with new projects there.

BP’s Russian venture is facing the loss of the licence for the Kovykta gas field. The move follows Kremlin pressure on projects involving companies like Royal Dutch Shell and Total.
“The big oil companies haven’t been doing much new in Russia, they have been seeking to hang on to what they’ve already got rather than signing new deals,” said Julian Lee, analyst at the Centre for Global Energy Studies.

“Private investors generally are finding life more difficult. There’s a lack of clarity for investors.”

Russia’s vast resources of oil and gas have prompted Western oil firms, facing increasing difficulties in gaining access to large sources of new reserves, to flock to Russia.

Now, the companies are finding the climate increasingly tricky and, in a shift in tone, some are indicating that new investment might be shelved.

Gulfnews