Analysts from Alfa-Bank reviewed the outcomes of the International Forum Russia Energy Week 2024, held in late September, highlighting the oil and gas sector’s ten-year development plan and its reliance on policy support. While policy backing has driven much of the sector’s momentum, commercial financing remains essential to upgrade the asset base, modernize industrial capabilities, and fund new technology for exploiting hard-to-recover crude reserves, commonly known as TRIZ.
FEC contribution
Alfa-Bank’s report shows Russia’s proven oil reserves totaling about 32 billion tonnes, with roughly 18 percent in new fields and 59 percent classified as TRIZ. Advancing 18.6 billion tonnes of reserves will require additional fiscal incentives and the deployment of more sophisticated technologies, together with higher investment and easier access to financing for the sector.
Although recoverable oil reserves appear sufficient to meet long-term objectives of the energy ministry in terms of annual output around 540 million tonnes, by 2030 experts expect TRIZ to account for more than 80 percent of production, a share that could complicate further growth. Investment declines in 2020-2023 restrained sector expansion; in 2023, growth in proven reserves reached a six-year low of 565 million tonnes, and Rosnedra forecasts indicate this year’s production may narrowly exceed reserves. Deputy Prime Minister Alexander Novak projects a range of 515-521 million tonnes.
Novak stressed that global energy demand rose by about 13-14 percent over the last decade. He projects primary energy consumption to rise by around 25 percent over the next two decades. He expects traditional energy sources, especially oil and gas, to continue supplying world markets. He also forecast that annual oil consumption could reach roughly 120 million barrels per day by 2050, up from about 102 million today, while gas consumption would grow even faster, by roughly 35 percent by 2050.
He added that although the share of hydrocarbons may ease slightly, it will still dominate global energy consumption.
Forum participants concluded that a new cycle of exploration and development investment for federally studied oil and gas reserves is required. First Deputy Minister of Energy Pavel Sorokin noted that the sector accounts for more than 20 percent of national investments, and the contribution of the fuel and energy complex is expected to rise as infrastructure investment, GDP growth, and a competitive economy are pursued.
attracting investment
Sorokin estimates that as TRIZ’s share of production and reserves grows, oil companies’ capital expenditures and operating costs will rise, and natural resource rents will be halved. In this scenario, industry players and competent organizations must collaborate to craft a fundamentally new approach that speeds up drilling, geological exploration, and cost-effective TRIZ development.
To advance the resource base, the digitalization of project documentation needs to deepen, with closer involvement from the Ministry of Energy and the Ministry of Finance in field development projects for centralized deployment of existing technologies and financial incentives. This approach would best advance the existing resource base while balancing industry and state interests.
Alfa-Bank analysts insist that while the main driver of resource-base growth is state support, the push to develop TRIZ should not be limited to tax incentives. A joint project-based effort to create commercially viable technologies is a critical element for maintaining Russia’s oil competitiveness on the world stage.
Vladimir Verkhoshinsky, head of Alfa-Bank, argues that building a robust Russian component base should be the starting point for expanding the resource base during 2025–2035. He says that solving this problem requires a state-led framework of integrated interaction among market participants with the involvement of relevant agencies and financial institutions.
“This will raise the investment appeal of projects and improve the credit quality of the oilfield services sector”, Verkhoshinsky adds. “The sector, in particular, is tasked with expanding service contracts within a centralized industrial order, creating conditions to attract investment in high-tech projects with paybacks of seven years or longer.”
A model that aligns credit risk between manufacturing and oil-service companies could help broaden bank financing for the sector, supporting the goals of developing the domestic component and industrial base. Alfa-Bank analysts warn that attracting investment from both state subsidies and private capital for domestic oilfield service technologies and geological research methods remains one of the most urgent challenges. Without this, the resource base could shrink.
Stability has begun
Active TRIZ development in Russia is especially important as conventional oil reserves decline and production must be kept steady in 2026–2030. The energy ministry projects that global oil demand growth in this window could add 5–7 million barrels per day of consumption.
The reserve capacity of OPEC plus and the potential for continued production growth in the United States, Canada, and Brazil are expected to secure global oil consumption by the end of the decade, but the steady decline in production in mature fields is projected to continue at about 3–7 percent per year on average, leaving room for investments and the development of unconventional reserves through 2030–2050.
Even amid volatility in commodity markets driven by non-market factors, macroeconomic trends, and geopolitical tensions, a basic analysis indicates that a period of stability has emerged in the oil market that could last at least until the middle of the decade, according to the report. Ongoing decisions by OPEC plus are seen as paving a path toward a renewed investment cycle after years of underinvestment from 2015 to 2020. Under these market conditions, Russian oil is expected to remain in demand, and investments in its development today could provide a strategic advantage tomorrow as drilling and extraction efficiency in traditional fields worldwide face pressure. TRIZ remains a forward-looking pillar for the sector, enabling Russia to advance its development after 2025–2035 through timely investments in the oilfield services industry.