Russia must urgently reform its energy sector if it is to remain a global player in the energy markets, according to experts and business leaders speaking at the St. Petersburg International Economic Forum.
“Russia needs to recognise the changing drivers for energy intensive industries and products,” Maria Van der Hoeven, executive director of the International Energy Agency, said at a panel discussion on Russian energy efficiency.
“A lot [of energy supply] does come from Russia, but that period is drawing to a close, we see that from the shale gas revolution in the U.S. So something has got to change.” The shale “revolution” in the U.S. has forced down energy prices globally and increased competition for Russia as a supplier of energy.
Nonetheless, oil and gas still account for a large and increasing share of Russian exports, making up around two-thirds of total exports in 2012. According to Fitch Ratings, Russia is the most oil-dependent of the world’s 10 largest economies, with oil and gas accounting for 50 percent of federal government revenues and up to 20 percent of gross domestic product.
Speaking at the Forum, Russia’s deputy prime minister, Igor Shuvalov, said Russia’s dependency on oil and gas revenues was “huge”, and that this needed to change. Reducing Russia’s dependency on energy exports is a key priority for the government, along with modernizing the country’s aging infrastructure and economy overall.
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