Russian Economy General News: #1

Austin wrote:and then from around the world , that is what US does to over come
its problem with people resource.

Even if Russia is rich with natural resource , its stupid to rely on it

GarryB wrote:, but when you can leave the cities and go out to the villages and see their life is better and easier with modern technology.

Austin wrote:It seems Russia does not encourage from people around the world to come and work but only from CIS countries. That should change.

Just look at the Skolkovo project that is divided into about 6 main areas of development to focus on.

MOSCOW, March 20 (Xinhua) -- Russia's military-industrial complex has exhausted its scientific and technical stocks and badly needs influx of skillful workforce, high-ranking officials said Wednesday.

"I have to state that scientific and technical stocks have effectively exhausted today," Deputy Defense Minister Yuri Borisov told a conference of military-industrial complex.

Russia risked losing an opportunity of scientific-technical breakthrough in areas such as the creation of supersonic devices, weapons based on new physical principles and weapons of cyber warfare, Borisov warned.

Speaking at the same conference, Russian Deputy Prime Minister Dmitry Rogozin said the country's military-industrial complex suffered from high interests rates on loans.

"How can we develop the industry with 10-12 percent loans? It could only be done with (the rates) of 4-5 percent," Rogozin said.

He noted that Russia's military-industrial complex badly needs skillful workforce, and called for a "brain import" of foreign talents."When it comes to brain import, we are ready to give them residency permits, work permits and even Russian citizenship," Rogozin said.

He reiterated Russia would not purchase ready-made military equipment abroad but would buy technologies, attract hardware developers and skillful workers.

According to Rogozin, the Russian army needs cutting-edge automatized and robotic arms because the armed forces face severe shortage of personnel.

"This is about unmanned air, ground, sea, submarine systems," he said, adding that a Russian soldier armed with such an equipment must be capable to fight against five enemies.

The Russian government has allocated 20 trillion rubles (about 666 billion U.S. dollars) for the rearmament and modernization of its armed forces until 2020.

MOSCOW, March 20 (RIA Novosti) - Russian Prime Minister Dmitry Medvedev called on Wednesday for the further consolidation of the defense industry, calling it a key to the country’s economic development.

Priority should be given to the sector’s integration along all lines, he told a military-industrial conference in Moscow, dedicated to the 60th anniversary of the establishment of the Military-Industrial Commission.

“You can’t build a modern army and navy just like that, in a backyard shed,” he said.

As of today there are 61 integrated structures in the defense industry, comprising 771 large enterprises, which account for over 74 percent of defense industry output.

By 2020, a new-look defense industry is to be formed with about 40 large science and production associations.

The defense industry is expected to grow at a rate of 10 percent in 2013-15, Medvedev said, stressing that its development is crucial for national economic development as a whole.

He underscored the importance of state support for innovative projects at all stages.

“We hold serious positions on the world arms market, being the world’s second largest seller by volume, but it is not easy to keep that place: We need to move forward all the time," Medvedev said.

Russia's ambitious 2011-2020 arms procurement program stipulates the upgrade of up to 11 percent of military equipment annually and will allow the country to increase the share of modern weaponry in the Armed Forces to 70 percent by 2020. Russia allocated about 908 billion rubles (about $30 bln) on state defense order spending in 2012.

KRASNOGORSK, February 23 (RIA Novosti) – Russian Deputy Prime Minister Dmitry Rogozin said the implementation of Russia's ambitious arms procurement program will bring drastic changes to the country by 2020.

“By 2020, the moment of the weapons program implementation, we will be living in a quite another country…In the country, which will surely get off the oil and gas needle, in the country which will have new modern plants, in the country, where the cult of an engineer and constructor will be created,” Rogozin, who is in charge of the defense industry, said.

“We will turn the tide, this will be an industrial power,” Rogozin said on Saturday at a meeting of Russian patriotic organizations in Krasnogork, in the Moscow Region, marking the holiday, known as Defender of the Fatherland Day.

(Reuters) - Forty-five years after its accidental discovery deep under the swamps of West Siberia, the race is now on to develop the world's largest shale oil resource, Russia's Bazhenov.

A drilling push begins in earnest this spring, spurred by President Vladimir Putin's promise to loosen the Kremlin's grip on proceeds from its natural resources in hopes of sparking a shale revolution aimed as much at remaking Russia's oil industry as at raising output.


ExxonMobil and Russian state oil company Rosneft are headlining the new phase of exploration to see whether Bazhenov lives up to its billing.

Russian producers have already reported 500 million metric tons (551.16 million tons), or 3.5 billion barrels, of recoverable crude oil reserves in Bazhenov to the Russian government.

Much studied but largely untapped, it lies in impenetrable black clay beneath existing oilfields covering most of West Siberia, whose westernmost hub is the oil town of Tyumen, 1,700 kilometers (1,060 miles) northeast of Moscow.

"Back when I worked in exploration, one of our geologists called it the wild black stone," said Tatyana Smagina, head of reserves management at the Tyumen Oil Research Centre, part of Rosneft.

The centre holds core samples from 30 years of drilling in West Siberia that are studied to help determine where Russia's new oil will come from.

The government now estimates that the wild black stone could yield 1-2 million barrels per day by the end of the decade.

Yet the full scale of its riches remains a mystery. Estimates range from a conservative three billion metric tons, or over 20 billion barrels, to as much as 143 billion metric tons, according to a survey of Russian research by oil consultants IHS Cera.

The upper estimate would mean an extraordinary one trillion barrels, nearly four times the size of Saudi Arabia's oil reserves or 30 years of world supply at current rates of consumption.

The International Energy Agency describes Bazhenov as the world's largest source rock, a bed of ancient organic matter dating back to the Jurassic period which has given rise to most of the crude oil pumped from the fields of West Siberia.

NO BAKKEN SURGE, YET

Those vast reserves do not necessarily add up to a U.S.-style production surge in the making.

The U.S. state of North Dakota has estimated oil production from its Bakken and other formations could reach 1.2 million barrels per day by 2015.

Yet Russia already pumps more conventional oil supply than Saudi Arabia at around 10.3 million barrels per day and may look to shale to maintain rather than revolutionize production.

Its oil-dependent leaders, rather than fearing the surge in U.S. output from shale, have looked on with curiosity and some envy.

For them, Russia's rediscovery of its shale resources is aimed more at offsetting declines in the fields that produce most of Russia's crude - the Soviet giants of West Siberia, like the Salym group fields where Bazhenov was discovered in 1968.

Output there is now declining at an average of about 2 percent a year.

The U.S. experience has produced a new generation of high-tech, low-cost drillers and producers with advances in technology, including horizontal drilling to tap reservoirs more efficiently, and hydraulic fracturing to release hydrocarbons from non-porous "tight" rock.

In contrast to the entrepreneurs who predominate there, Russia's oil industry has been concentrated in the hands of a few powerful players over the last decade, mostly controlled by the state, raising questions about its efficiency.

It faces the task of moving away from standardized bulk drilling and top-down design decisions toward shale and other new deposits where new technology must be developed and honed along the way.

The challenge for the crude oil market posed by the U.S. shale surge "would not hurt us so much if we were more competitive," said Tatiana Mitrova, head of the oil and gas department at the Russian Academy of Sciences Energy Research Institute.

The drilling now under way should determine whether Russia can frack its way to a more modern, competitive oil industry with all the technological savvy of the upstarts in North Dakota, and whether Bazhenov is the key.

"Bazhenov is a huge formation. It covers half of western Siberia. I have seen maps that claim it is 22 times the size of the Bakken in North Dakota," said Richard Andersen, chief financial officer of Eurasia Drilling, Russia's biggest driller.

But Andersen said it was "not homogenous" across western Siberia. "It may work very well in some areas and not in others. I would not say it will be condemned or proven in the next year. But we should get a view as to whether it will work well or not."

Recent drilling by producers such as Salym Petroleum, a joint venture between Shell and Gazprom Neft, which operates in the group of fields where the Bazhenov was discovered, have yielded healthy flows of light, low-sulphur crude. It has also indicated the presence of microfractures in some areas which could help the oil flow out of the tight rock.

TAX KEY

The challenges to Russia's tight-oil revolution so far, however, have had little to do with geology.

Efforts to establish joint drilling ventures have run up against post-Soviet legislation which does not recognize project operators, while cumbersome planning requirements have forced some producers to scale back their plans for this year.

The biggest question of all is posed by the tax system. With lifting costs for a barrel of Bazhenov crude estimated at up to $40, the tax regime has been the main obstacle to its development as producers worked their way through cheaper conventional reserves.

The Kremlin's willingness to loosen the state's grip on oil taxes - which skim 90 percent of the revenue from each barrel of export crude - underscore its interest in exploiting shale.

But even with the prospect of a boost to the oil revenues that amount to 40 percent of the Russian budget, that willingness only goes so far.

The government has offered a package of tax breaks which includes a sliding scale of breaks on Russia's revenue-based mineral extraction tax and targeted breaks on the development of Bazhenov and other shale deposits which are part of Rosneft's drilling ventures with ExxonMobil and Statoil.

But the package - which was due to be approved on October 1 - has yet to reach parliament. Finance Ministry officials have assured investors that it will pass in time to come into effect next year after undergoing tweaks.

Producers also face the expensive prospect of re-drilling their West Siberian fields to access the Bazhenov below, even though it could be tapped through existing wells.

A boon to drillers such as Eurasia and Schlumberger but a drag on the economics of developing Russian shale, this is essentially an accounting measure to prevent fraudulent reporting of conventionally produced oil as new oil to claim tax breaks.

"They are worried that suddenly 70 or 80 percent of Russia's oil is going to be tight oil," a source close to one of the exploration projects said.

The proferred tax breaks may be enough to accelerate exploration of Bazhenov and other tight formations and allow Rosneft's drilling partnerships to proceed, but commercial production will probably require another round of tax reforms, the source added.

The very low levels of rock permeability required to qualify for tax breaks also may rule out profitable development of some tight sandstone deposits on the edges of what the Energy Ministry has called the "grey area" between true shale and West Siberia's current, conventional plays.

Of Russia's 26 billion metric tons of recoverable reserves, two-thirds or more are thought to be "tight", a share that is rising as Russia's easily tapped conventional reserves are depleted.

"That is semantics," said Oleg Mikhailov, who once ran pilot projects in tight oil at TNK-BP and now works at mid-sized producer Bashneft.

"What is easy today was tight yesterday. What is tight today with technology and a good tax regime will be easy tomorrow."

Viktor wrote:I think Russia economy is doing just fine. With its 3.6% GDP growth they are growing at close at 4 times more speed than EU.

Viktor wrote:last year population fall was stopped and life expectancy is growing rapidly.

gaurav wrote:The problem with Russia is some times the jokes become reality..(Tupolev.. )

Your links are accurate but with "Technical Spin"..

MY statistics are Dire with no techincal SPIN.. but ..

But what your links say is approx same what I told..(with and without technical SPIN) ..

you yourself have pointed out some dire conditions in Human resources..

Russia is a dying country .. it will have put forward its new generation.. which is not an easy task.

Putin also said that Russia currently supplies arms and military equipment to 66 countries, has concluded agreements on military and technical cooperation with 85 countries and its portfolio of orders for defense-related products currently stands at $46.3 billion.

Sujoy wrote:This is very interesting Viktor . You mean the population of ethnic Russians/Slavs , other minorities are increasing ?

Well new Rosstat data shows that from January through October 2012 the Russian population naturally grew by about 800 people. Compared with the relevant period in 2011, births are up by 6.5% and deaths are down by 1.5%. In other words, the population of the “dying bear” is growing even without accounting for immigration. This hasn’t happened since 1992, when the Soviet Union had only recently collapsed and the travails of the transition to a free market had barely begun.

Werewolf wrote:Trust me German economy isn't that great as people may think.

2-4 years and Germany has equal conditions to Greece,Spain,Portugal.

Russia’s Economics Ministry has lowered its 2013 forecast for the country’s GDP growth to 2.4 percent from 3.6 percent amid stagnating exports and faltering investment, Deputy Economics Minister Andrei Klepach said on Thursday.
The ministry cut its GDP growth forecast after Russia’s exports, a key source of budget revenues, failed to demonstrate any growth in 2013 while fixed capital investment growth was just 4.6 percent, Klepach said.
If the data for the first months of 2013 are extrapolated for the full year, Russia’s GDP growth is estimated at a mere 1.7 percent, Klepach said.
The Economics Ministry also expects net capital outflow to reach $30-35 billion in 2013 compared with its original forecast of 0-$10 billion, Klepach said.
Russia’s GDP grew only by 3.4 percent last year, the lowest since the deep recession of 2009, with weak demand for Russian exports in Europe.
Russia's newly-appointed Central Bank chief Elvira Nabiullina said earlier this week Russia needed to rethink its commodity exports-based growth model, with a new emphasis on internal sources of development, diversification of the country’s raw material-based economy, increased investment and improvement in the investment climate.

April 12 (RIA Novosti) - The Russian economy could slip into recession this coming fall unless measures
to stimulate growth are urgently implemented, Economy Minister Andrei Belousov said on Friday.
“We will propose economic stimulation measures,” he said, warning that otherwise Russia will see zero
growth by the fall.
“These measures are necessary because we have to get out of the situation we are now in, so as not to
fall into recession,” Belousov said, adding that a meeting on the issue with President Vladimir Putin
is due to take place in the near future.
The ministry lowered its 2013 forecast for the country’s GDP growth to 2.4 percent from 3.6 percent amid
stagnating exports and faltering investment, Deputy Economy Minister Andrei Klepach said on Thursday.
The ministry also expects net capital outflow to reach $30-35 billion in 2013 compared with its original
forecast of 0-$10 billion, Klepach said.
Russia’s GDP grew only by 3.4 percent last year, the lowest since the deep recession of 2009, with weak
demand for Russian exports in Europe.