2009 Russian oil & gas outlook survey

Deloitte has traditionally carried out a survey among oil and gas industry chief executive officers (“CEOs”) of Russia.  The survey found out that 62% of the respondents see their future involving gas exploration.  To compare, the previous year survey marked the interest towards this sector only at the point of 46%.

Oil demand over the next five years will increase – about 70% of the interviewed believe so.  It is needed to note that this year oil price predictions of CEOs have demonstrated a wide divergence: some believe the price regime of the past 12 months will return relatively quickly, while others think that there has been moderation in prices, back to the level of a few years ago.  They anticipate the annual average price (in USD per barrel) of Urals and Brent crude oil will be USD 82 in 2009, USD 74 – in 2010, and USD 67 – in 2011.  In this regard, the industry representatives gave their USD oil price forecasts based on the 2008 currency rate calculations.
 
70% of the respondents expect a significant increase in the frequency of mergers, acquisitions, and restructuring in the global oil and gas industry in 2009.  48% of the respondents expect the increased capital inflow over the next five years.  And the primary sources of capital for the Russian oil and gas industry for the next two years, according to CEOs, will be internally-generated cash flows (44%), third party debt (30%), and private equity (22%).

The survey has shown that a lot of companies have already started or are planning to dramatically revise their refining capacities, have reduced a level of the planned costs for inventory purchase and field costs.  And about 40% of respondents do not intend to change their investment plans significantly in the areas of exploration and production.

This survey has been carried out by Deloitte for the third successive year.  Oil & gas industry CEOs were interviewed in the period from September through November 2008 with the help of questionnaires.  The scope of inquiry covered both large Russian and international vertically-integrated holdings and independent medium and small enterprises.

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