Sanctions forcing Russia's energy sector to seek new partners, replace technology - minister

Sanctions are a challenge for the Russian oil and gas sector, which has enjoyed more than favorable conditions for the past 14 years, Energy Minister Alexander Novak said.

Sanctions are a challenge for the Russian oil and gas sector, which has enjoyed more than favorable conditions for the past 14 years, Energy Minister Alexander Novak said.

"To say that sanctions are not having any impact is dishonest. Right now, when under the conditions of sanctions some of our foreign partners are leaving Russian projects contrary to their benefit, we have to tackle two challenges at once: look for new partners for the development of fields and replace technology," Novak said in an interview published by national daily Kommersant on Monday.

He said there has been growing interest from Chinese and Indian partners in participating in the development of Russian fields, both offshore and onshore.

"Our countries' companies are already holding the corresponding negotiations. In regard to technology, the priority areas for import substitution have been identified," Novak said.

He also said that it is necessary to develop new technologies in order to remain competitive in any circumstances and Russian companies are doing this. Furthermore, production of shale oil is a strategic priority for the sector in the medium term, the minister said.

"Right now, the rate of extraction of reserves from tight reservoirs in Russia amounts to less than 1 percent, and substantial resources, estimated by experts at 11 billion-22 billion tonnes, are not explored. Bazhenov suite oil reserves are on the books of Rosneft, Surgutneftegas, Lukoil, Slavneft, Russneft and Gazprom Neft. Oil companies are already facing the challenge of developing them on a commercial scale," Novak said.

However, he said Russia currently has conventional gas reserves that are sufficient to meet domestic demands and for export. Shale gas is seen as a future source of natural gas for Russia, Novak said.

Read more: Kudrin: Russia to see full-fledged economic crisis in 2015>>>

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