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[edit] Russia’s Oil Industry Past and Present
[edit] Overview
Today Russia holds the world’s eight largest oil reserves. Russia is also the world’s second largest exporter of oil. In 2007, Russia produced 470 mt of oil. This accounted for 12 percent of the world’s total. Only Saudi Arabia produces more oil. Russia’s economic growth over the last few years has been fueled by energy exports. In this time, Russian oil production has increased and oil prices have gone upwards. Russia’s economy is heavily dependent on oil and natural gas exports. This makes the country vulnerable to changes in world oil prices. According the International Monetary fund and the world bank, in 2005 Russia’s oil and gas sector accounted fro around 20 percent of the GDP. Oil and Gas also represented 60 percent of the country’s export revenues. These numbers jumped to 67 percent in [[2007[[. Oil and gas also accounted for 30% of all foreign direct investment in the Russia. [1].
[edit] Industry today
Russia’s oil Industry today developed from the collapse of state ministry that had been created from the USSR’s command economy. Since the fall of the Soviet Union, a major private oil companies have emerged to dominate the nation’s oil supply. The largest economic change from these companies is that oil production in Russia is no longer funded by the state, but rather by selling oil on the domestic and export markets. Despite the fact that Russia’s oil industries are today private, they still have vivid memories of their Soviet past. Many of these companies have adopted Western technology and even corporate management from abroad. However, throughout the industry there is a blend of fundamental changes in reaction to a sudden entrance into a largely market environment. These companies still have strong elements within them inherited from a state controlled upbringing. All of Russia’s oil Companies today started as divisions of the Soviet Ministry of Oil. Each of these divisions was responsible for developing a compact geographical region[2]
