Opportunity for Cooperation in Energy
Sector between Russia and Japan in
Eastern Siberia and the Russian Far East
International Conference on Energy Cooperation between Russia and Japan Mitsui & Co. , Ltd. Chief Regional Representative in CIS Hiroshi Meguro
Current Global Oil Demand and Its Outlook
Oil is one of the most stable energy resources given that world primary energy demand will increase, and demand outlook for oil is expected to increase.
It will be led mainly by Asian countries such as China and India.
1024 947
North America 312 440
Central & South America
879
Europe & Eurasia
810
385 567
Middle East
171 288
Africa
2013
1415
Asia Pacific
World total 【Unit: mil tonnes】
4185 5065
2013 2035 Reference:BP Statistics
Oil Production and Export in Russia (2014)
72% and 26% of produced oil is exported to European and Asian regions respectively. Oil production from West Siberia, which produces about 60% of the oil, is in a declining
trend. It is expected to increase production in the frontier areas such as East Siberia. Russia is focusing on the development of those areas promoting development programs
of the Russian Far East and is intending to increase exports to growing Asian market.
Oil production: 10.56 mil bpd
(4.75 mil bpd is exported)
To Europe: 3.42mil bpd
Reference:U.S. Energy Information Administration, Wood Mackenzie
To Asia: 1.24 mil bpd <Main breakdown> ①ESPO pipeline: 0.81 mil bpd ②Sakhalin 1 & 2: 0.29 mil bpd
<Oil Production Outlook>
Existing fields
mil tonnes per year
Discovered
Undeveloped
Offshore
Far East frontier, Shale
Onshore exploration,
others
Crude supply to Asia is increased after ESPO pipeline start up. Crude supply to Asia is also increased contributing to strengthening Japan’s energy
security and diversification of oil resources. ESPO expansion may boost crude oil supply to Asia.
ESPO Pipeline Capacity and Crude Destination History
Concentrated in Asian markets such as Japan and China
Reference:Transneft
<Current Capacity> ① Nakhodka(Kozmino port): 600 thousands bpd (30miltons/year) ② China Daqing spur: 300 thousands bpd (15mil tons/year) <Expansion Plan> ※Planned to be expanded by 2019 ① Nakhodka(Kozmino port) : 1000 thousands bpd(50mil tons/year) ② China Daqing spur: 600 thousands bpd(30mil tons/year)
Export from Nakhodka(2014):501 thousands bpd
Export to China(2014): 300 thousands bpd
Total: 501 thousands bpd
Total: 314 thousands bpd
Gas Field Oil Field
①External factors
Maturation of European economy, which is traditional export market for Russian oil and gas
EU’s intention to decrease dependency on Russian gas
Growing energy demand in Asia
Importance of the Development of Resources in Eastern Siberia and the Russian Far East
②Internal factors
Production decline of existing oil & gas fields mainly in West Siberia
⇒Development of frontier areas such as East Siberia is required
Diversification of energy market is required
Development of resource-rich Far East area is required.
Development of East Siberia and Far East Russia is most important issue for Russia.
Energy procurement from Far East Russia significantly contributes to Japan energy security.
Development of this area is beneficial both for Russia and Japan. Thus, Mitsui has the intention to be engaged in projects from upstream to downstream in the area.
<Environment Recognition Surrounding Russia>
12 cities with over 1mil population
St. Petersburg Ural mountains
Moscow
Far East Federal District
Trans-Siberian Railway
Siberian Federal District
12 cities with over 1mil population
Most part of population lives in this area
Appendix
Suppliers of Crude Oil to Japan
North America
Central & South America
Russia
Asia Pacific
World total 【Unit: mil tons】
2005
Reference:METI
188,1
Middle East
158,3 140,8
11,9 8,2 9,3
0,0 0,4 2,6
1,5 13,0 13,9
0,0 0,0 0,0
208 183 170
2010 2014
Africa
6,9 3,0 3,0
Suppliers of Crude Oil to USA (2014) 142,0
North America
109,2
Central & South America
3,1
Europe & Eurasia 91,2
Middle East
14,5
Africa
1,9
Asia Pacific
World total 【Unit: mil tons】
362
2014
Reference:U.S. Energy Information Administration