Posted in Paparazzi Ethnography, tagged Tromsø on June 30, 2013| Leave a Comment »
Posted in Paparazzi Ethnography, tagged Helsinki on June 30, 2013| Leave a Comment »
6/30: Laundry in Helsinki, gave me a few hours to ponder Arkhangelsk, SPB, Moscow. Game changer — April, at the Arctic Council meeting, Stockholm, I suggested the trend in predictions over the past 15 years could not, or did not, anticipate game changing events, such as increases to oil and gas production through fracking techniques. As a consequence, was it then premature to discuss opening the Arctic to oil and gas development, and if so, how could everyone in the room consider the option as settled? The question took form during the Economists Summit, Oslo, March, when a more general statement emerged from the audience about the logic of opening the Arctic to oil and gas developments given the current condition of security of supply and insecurity of demand. 
By the time I arrived at the St. Petersburg Economic Forum, June, the topic was global outlook on natural gas. At the International Energy Agency (IEA) Launch of the 2013 Medium Term Gas Market Report, Maria van der Hoeven, Executive Director, IEA, suggested that low natural gas prices in the United States, high prices in Europe, and stratospheric prices in Asia were symptomatic of the lack of a global gas network. Moreover, the mismatch left open opportunities for Russia to capture Asian prices by directing hypothetical Arctic natural gas pipeline projects toward China. Over supply in Europe from United States exports would dampen demand years to come. The question was reformulated as follows: Going back 15 years, we see reverse cycles of demand-supply security. 
In the late 1990s, increasing demand and a flush of natural gas availability opened the possibility of a turn toward electricity power generation based on natural gas. By the early 2000s supply tightened while demand was peaking. Throughout the 2000s tightening supply destroyed demand along with other factors of volatility, until 2006 when supply begins to pick up, and by 2010 there is general acknowledgement of supply abundance during a period of weak market demand. These reversals of security affecting the fortunes of supply-demand relationships, did not deter IEA, alongside all other consultants, from making continued strong predictions. 
According to M. Hoeven, the question is best addressed in terms of asking what are the “game changers”. How would China’s economy move forward, how would supply increases take place in areas where hydrofracking technologies are still nascent. Finally, I posed the question to panel members at RPGC, Moscow, who were quick to point out that they do not, indeed, pose forecasts, but in fact, scenarios. Business “likes stability, stability of trends moving forward into the future”. But given past events, volatility and swings in the nature of global gas markets and its resilience toward globalization, could they mention game changers that would alter the scenario landscape. 
Posted in Paparazzi Ethnography, tagged Moscow on June 22, 2013| Leave a Comment »
Congress website, Sponsored by Industry
Program in English.
Travel Information
Delegate check list
Epilogue:The feast
Attending the Congress is an iteration in the forward movement on understandings about Russian oil and gas.
On display are the particular feelings Russian academic and some industry and government have toward changes in markets and potential pipeline developments.
For example:
Despite recognition of immense importance of shale gas extraction in the United States upon Russian industry taking place at this meeting…
[including official denials of its importance, as witnessed by anyone attending Vladimir Putin‘s response to Daniel Yergin‘s question about changes to industry at the plenary of the St. Petersburg Economic Forum only days previously, when the Russian President announced there is no shale gas revolution in the US but in fact a short lived environmental disaster taking place]
— one main play is the rough-shod feelings expressed by Russian industry at the hands of their consumers, the Europeans, for whom they feel betrayed after having invested in building pipelines to the West.
That is to say, efforts associated with infrastructure so meticulously built up and managed by Russian personnel to deliver gas to Western Europe are ignored by consumer efforts to import global gas and renew attempts to create spot markets. For Americans, of course, this sentiment would fall on deaf ears, given the pipelines themselves are depreciated over a 20-year period after which, they simply become cash cows.
It is as if there is a certain nostalgia over infrastructure and what constitutes investment in Russian industry is the actual material placement and not its economic value.
At any rate — these are raw notes below taken as the days were long.
6/25 — Day Three:
Russia’s Gas Industry: Strategies and Prospects The Russian Far East and Eastern Siberia as a New Gas Hub: Developing Production, Processing and Supply of Gas to the Asia-Pacific Region
Co-chairs: Torstein Indrebø, Secretary General, IGU, and Alexey Mastepanov, Academician and Deputy Director, Institute of Oil and Gas Problems, Russian Academy of Sciences. Alexey provides introduction. Demographic change and in particular, scientific and technical progress have changed the gas growth agenda, to a shift toward surplus energy where consumer will select their own energy and provider and area of consumption.
Totally different criteria come into play. With the tightening competition of the consumer energy prices will fall. These processes are not alien to energy, even after the shale revolution in the United States. Technical changes do not remain the same. “Stone age did not end because we ran out of stones” — hydrocarbon age will not end because we run out of oil, but other advances toward a non-hydrocarbon era. Hopefully these issues will be discussed, to make us revisit these issues.
Anatoliy Arabskiy, Deputy Chief Engineer for Research, Technology and Ecology, Gazprom. Dobycha Yamburg, Innovation technologies in gas production and their influence on environmental protection. We have planned a number of environmental measures. Sustainable development. Describing technical changes to gas development that enhance environmental importance. Highly technical discussion about subsurface water movement.
Alexey responds: Mr. Arabskiy clearly demonstrated there is significant cost reductions in efficiency in gas technology.
Vladimir Pashkov, First Deputy Chairman of the Government of Irkutsk region. Development of the East Siberian petrochemical cluster. Improvement of efficiency of oil and gas recovery by new technologies. We are subsidizing economies of other countries through lack of efficiencies. Unfortunately, increase in prices are not directly linked to economic performance. We are introducing a number of measures to maximize development and revenues. The premise that significant oil and gas reserves exist heighten potential for production. Proper geologic conditions for accumulations, existing transportation systems, modern chemicals, human and scientific resources are in place in Irkutsk and other factors give optimism. We are developing an oil and gas cluster — a complex that would increase production. Developing Irkutsk gas for export purposes. Creating a wealth fund for investment technologies.
Dmitriy Sokolov, Researcher, Asia Pacific Energy Research Centre/APERC. Japan APEC energy demand and supply outlook 2013 by APERC: the role of natural gas in energy balance of APEC economies for the period till 2035. We do forecasting of energy to 2035 in Asia. A few words about APEC, examine energy sector in 21 companies, 60 percent of global energy demand in Asia. We develop research and cooperative programs for sustainable energy, fully financed by Japanese government. We do annual statistics, overview, demand and supply outlook (every four years), research support for cooperative programs. Programs: Oil and gas security exercise (GOSE) held in STPB, April 2013. and LNG Producer-Consumer conference held in Japan last year.
Scenarios: Business as usual (“Assumes existing policy continues, including polices in process of implementation, legislation already approved”) Three alternative cases: High gas scenario; Alternative urban development scenario; Virtual clean car race.
Key results: reducing primary energy intensity by 2035 is feasible. Nuclear electricity production increases. Gas based generation rises by 10 percent in contrast to coal.
To support large scale natural gas from Russia: Education–policy makers cannot take action without the support of their stakeholders and constituents. A completely wide difference between Russian and Australia. Australia is totally open (2) Promote energy efficiency-provide information and set standards for buildings, appliances, and vehicles, eliminate wasteful fossil fuel subsidies provide financing for cost-justified EE investments, promote Energy service companies (3) Promote energy research.
Anatoliy Panferov, Deputy Chairman of the Committee for Environmental Management, Ministry for Development of the Russian Far East of the Russian Federation. Formation and development of the Far East petrochemical cluster.
Samuel Lussac, Analyst, Wood Mackenzie, Vladivostok-LNG: promoting development of East Siberian gas. Vladivostok program. Both Russia government and Gazprom want to develop huge gas resources in Far East and market them in Asia.
How to Monetize East Siberian Gas reserves: Looking to supply China and Far East. Different supply zones using different scenarios of transport (pipe, LNG). All deposits located away from infrastructure, specific gas itself requires refining terminal. 30 to 40 billion dollar pipelines. As a consequence high capital costs makes projects marginal. Take away: Chayanda project not economic. Vladivostok market is not large enough to develop these fields. Joint development of Chayanda and Kovykta may be economic, if gas went to China and Vladisvostok. Mineral tax terms provided by Russian government are relaxed to stimulate pipeline projects. Unlocking Siberian gas would be very capital intensive and partners should be welcomed. Also, government tax regimes would be welcomed. Gazprom would have to capture the market there and competitive against other
Vyacheslav Kulagin, Head of the Global Energy Markets Centre, Energy Research Institute, Russian Academy of Sciences, Development prospects for the global gas market: new opportunities and risks. Share of gas will increase from 20 to 25 percent. All forecasts are bullish, but there is some question as to whether gas demand in Europe won’t be replaced by other non-Russian supplies. Important coincidence: this graph shows a share of Russian export is falling. In principle we hope that demand will grow that our deliveries will increase and that pipeline shipments will be supplemented by LNG but the competition is pretty tough. If we sum up the projects being built and contemplated for European export, we talk about doubling capacity. Just 5 years ago we expected major increase in exports to Europe. 200 bcm per annum is an positive assessment.
Nabucco project unlikely. Azerbaijan will not approve. America: the shift to natural gas as a transportation fuel. The issues of pricing is major.
Vladimir Timoshilov.
Vsevolod Cherepanov, Member of the Management Committee, Head of the Gas, Gas Condensate and Oil Production Department, Gazprom. Gas-condensate assets: current situation and prospects. No show.
Vladimir Kontorovich, Laboratory Chief, A.A. Trofimuk Institute of Petroleum Geology and Geophysics, Siberian Branch of the Russian Academy of Sciences. Strategy and prospects of Russian gas industry development. No show.
Strategies to Strengthen a Leading Position in the Global Gas Market: Energy Diplomacy, Development of Transportation and Processing Projects, Marketing South Stream Pipeline – Europe’s Vital Project
Co-Chairs: Uwe Fip, Senior Vice President, Gas Supply East, E.ON Global Commodities SE, John Roberts, Energy Security Specialist, Platts
Torstein Indrebø, IGU. Main driver we see is air quality and public health, where the gas industry can provide competitive solutions. Huge differences in European, American, and Asian gas prices. Can disparities between oil and gas be continued. Finally, if we shall success in the gas industry and reach global age of gas, we need to create more trust for the gas industry, climate groups, students.
Sergey Balashov, Deputy Head of the International Business Department, Gazprom, Gazprom and sustainable development. Speaking ironically about environmental concerns, giving an example of the imagined protection of an imagined whale.
Valeriy Minlikayev, Gazprom. Specific reservoir details.
Uwe Fip, Senior Vice President, Gas Supply East, E.ON. Global Commodities SE Security of supply and growth of new market segments for natural gas. Short term trading with gas structure. E. ON. has restructured. Reform of the malfunctioning carbon market in Europe is leading to power generation primarily led by coal and oil. New LNG and pipeline projects (from Russia) provide security. Ensuring that Gas supply in Europe is secure into the future. New applications for natural gas in Europe, transport sector, real boom is to be expected when LNG is used for long-haul trucks.
Oleg Aksyutin, Member of the Management Committee, Head of the Gas Transportation, Underground Storage and Utilization Department, Gazprom, Energy efficiency of Gazprom gas transport projects.
Vitaliy Yermakov, Director, Russian and Caspian Energy, IHS Cambridge Energy Research Associates / IHS CERA, Changes in Russia’s LNG strategy and “Go East” gas policy. From the oil side, we will see major increase in LNG segment. It will be a resource to meet demand globally. Our team of economists at Goldman Sachs are saying that Asian countries are already outpacing Europe. By 2030 it will be growth of 7-8 percent. In 20 years Asia Pacific region, they will outpace Europe and America so dramatically, the west will not be able to catch up. “A new gas map of the world”.
New suppliers, with huge reserves. Traditional suppliers still here, won’t go away.
Shale gas put America at the top of the list. Turkmenistan will make an announcement soon which is huge. Traditional model suggested several major players with large reserves. In this tradition, huge pipelines would create supply to demand centers. But in the early 2000s with LNG, and now with new resources, are shifting this model.
In the US, everyone expected the States would become an importer, and created LNG terminals, and now, it is expected on being an exporter. The future is to what extent the US can be shifted to other parts of the world. Deepwater areas, huge reserves were discovered. From this perspective maintaining competitive costs. For Russia, the idea is to maintain competitive costs, or lower costs. We don’t expect major growth in the domestic market (Russia) so all expansion is largely for Asia.
Leonid Chugunov, Head of the Project Management Department, Gazprom “South Stream”: challenges and innovations. No show.
Ksenia Gladkova, Senior Adviser to the Secretary General, IGU Role of gas in global energy policies. I’m pleased to return to Moscow after presenting at the same conference. African members are displaying interest in joining us. Meeting in Azerbaijan, later this year in November.
John Roberts, last word — we had a strong stress on green house gas emissions, and ability of gas to mitigate issues. But we need to take a fresh look at the irony at the rise of CO2, that we live in an era of low coal prices and a lack of carbon prices that can mitigate. Four words: Supply is no problem. Security of supply is no problem and security of demand is the problem. Security of demand during G20 recently, took center stage, perfectly right, not because we’re here in Moscow, but because of the reciprocal nature of buying and selling. Politicization of security of supply and demand which impacts on long-term contracts, even though Norway was able to build the longest off-shore pipeline without any long term contracts, and it was the evident longterm supply that kept the market for that project moving forward.
“Politicization of Gas Corridors” — Role of government still important, I don’t know of any gas project that is not political. On the other hand, these political projects have to be commercial, you need two green lights. Just yesterday, in fact, there is not going to be a definable system (Nabucco) moving to Europe. Look around at Russia today, and you hear that phrase that Russia is an energy superpower, but you can also say the at the United States is an Energy Superpower, and the two are totally different species. They are the worlds two biggest developing hydrocarbon prospects.
Q & A: Game changers? [no one mentions bubble bursting in China] Remember that it was individual producers that provided innovation in shale, and it is doubtful that CNC or Rosneft or Gazprom, as large organizations can provide the kind of innovation that would be required to create a game changer.
6/25 — Day Two:
Strategic Role of Drilling and Oilfield Services in the Development of Upstream Projects
Valeriy Bessel, Executive Vice President, NewTech Services; Professor, Gubkin Russian State University of Oil and Gas. The oil production paradox, or is it worth spending money on drilling. Main costs of vertical integrated companies is development costs. He notes there is more development activity in US than in Russia. “Drilling 5 times less, wellstock 5 times less, and well stock 3.5 times less, and yet we produce more than the United States. Maybe we do not need development drilling, or maybe the United States is wasting their time, because they don’t know where to to put it. My provocation speech, which I will answer at the end of the day”.
“Music in the hall is sponsored by Spacik company”.
Konstantin Gribanov, Head of the Business Development Office, Rimera, Rimera’s Integrated approach to well service with guaranteed MTBF increases. Providing a service complex, with specially made metal technical products, leading to increased oil production and cost decreases.
Gavin Graham, Executive Vice President, Integrated Energy Services, Petrofac, New options for old fields: the changing role of oilfield service companies in extending the life of mature fields. West Siberia and Arctic possibilities for new development. 2064 oil reservoirs discovered, 1097 in production within 10 years.
Andreas Rentzsch, Vice President Sales, Bentec, Bentec’s “New Generation” cluster slider. New development in cluster slider for the Russian Market.
Andrey Petrakov, Director of the Scientific EOR Centre, VNIIneft, Using associated gas to enhance oil recovery. 24 percent flared gas instead of reinjection volume of natural gas. We do not pay due attention to gas. We had a decree adopted assigning 95 percent for gas utilization. Flaring gas is ecologically detrimental (see graph for details). Economic consequences of flaring, up to $13 billion per year through flaring. Difficult to stimulate subsurface developers to take advantage of associated petroleum gas (APG). Economic efficiency is not obvious.
Valeriy Bessel returns to answer his question of why Russia bothers with oil development, given its inefficient comparison to the United States, and nevertheless increased capacity over US development. Well, “suggestion” — we have to drill or efficiently, but [?]
Oil Exploration and Production in Russia: Trends and Prospects Oil and Gas Industry Innovation Development: Technological Instruments for Recovering Hard-to-Recover Reserves and EOR of Mature Fields
Oleg Pertsovskiy, R&D Director of the Energy Efficient Technologies Cluster, Skolkovo Foundation sponsors the plenary — first time participating in this conference, and starting the panel off. Viktor Martynov, Gubkin Russian State University of Oil and Gas, Introduces the panel.
Gloom and doom over oil production in Russia. Our Ministry of Education, adopted governmental decree divided education into priority and non-priority. Where do you think oil and gas fell into? Non priority, even though 50 percent of industry of the country depends on this topic. First of all, it was a negative moral consequence for the industry, but even an economic decay, the difference of financing for this topic would be half lower. Also, it is impossible to train a theoretical person without practical training. I won’t dwell on it, but if you have a change, I would like to ask all of you, we have to speak up as oil men, oil and gas companies are writing letters to Ministry of Education, everyone is stating extreme things, such as Oil and Gas is not innovative or priority. So we’re going to discuss some technology issues, even though we won’t be able to develop the science. As [Joseph] Stalin said, “human resources are decisive for all”.
Oil could even be considered a renewable source, when such fields like Remashkena, we produce more oil than appraised, that perhaps oil is not created at the same speed as we learned it, the problem is that there is no science on the topic and it needs to be explored, unless we miss another revolution — if we find out [for example] if field reservoir production is different that we understand [to allow oil to accumulate], just an example of the great discovery and changes that we are going to face. It is essential to understand our position, in order to have functions achieved special for this country, not just for oilers but for general public, every scholar and economist will see that every one job in the oil sector creates 12 jobs elsewhere.
Renat Muslimov, Board Member, Tatneft; Adviser to the President of the Republic of Tatarstan on the Development of Oil and Gas Fields. Russia needs to optimise oil recovery and maximise EOR. The status of oil industry as reproduction of reserves and oil recovery ratio. When we ignore everything, everything looks fine, but if we look at it scientifically we recognize some distinctions that we should not speculate and manipulate. Let’s do it as the Americans do it. No one will do without the oil syringe. Back in the Soviet time, the project was 580 million tons, but we have 640 million tons. We have to face the corruption. Easier to go along with payolla. The same with oil, we really have to proceed with the reality of demand. We are not reassuring reproduction. Couple of comments on Ramashka. The older systems seems to be much better than the latest system of realizing production. A complaint against the shift from technocratic authority over reproduction to bureaucratic and economic authority.
Dmitriy Kryanev, Academician, General director, VNIIneft. The current state and prospects of oil recovery from fields with hard-to-recover reserves. Begins with BPs annual 2011 chart of what is economic. Different methods for recovery (thermal, chemical) EOR methods. North Sea uses good recovery methods (CO2 sequestration). Shale gas in US is shifting to oil, because of drop in prices. Horizontal drilling and multi-scale fractioning. Data on US production of Shale, previous year 13 percent, maximum production 66 million tons by 2030. Average oil recovery in global, 30 percent, US 39 percent, Norwegian 50 percent. In Russia, official recovery rate is 38 percent.
Oleg Pertsovskiy, R&D Director of the Energy Efficient Technologies Cluster, Skolkovo Foundation. The Skolkovo Foundation’s role in supporting innovative development of the oil and gas industry. Describing Skolkovo set up how and why. Mentioned today already that many conversations about resource reproduction as a priority sector. We cannot just switch from oil to something else, for example, internet technology. We have to make use the resource as best as possible, value added. If we look at different institutes, all oriented toward different projects. We are focused on moving from R&D to marketability. Talking now about the set up of Skolkovo. Over 1100 proposals were received, over 240 when through review, 40 projects received funding.
Alexander Sitnikov, Director of the Oil and Gas Field Development Department, GazpromNeft Scientific Research Centre. The main technological challenges of and potential for increasing the efficiency of oil field development. What are key challenges? Talking in very technical language. … Improving regulatory framework of Russian oil and gas industry.
Ilya Mandrik, Vice-President for Geological Exploration, LUKOIL. Developing innovative geological exploration technologies on Russian offshore fields. Talking about offshore Arctic, implementing technical and regulatory competence, building up.
Ilnur Shigapov, Manager for Development in Russia, TGT Oil and Gas Services. Complex oilfield research to optimise mature field development systems. Rather technical. The previous speaker suggested regulatory changes to enhance offshore developments, in the Arctic for example (which Bessel suggested that Russian industry in comparison to the US are, on offshore, in an infant stage of development). The slides are available on the left.
[Just as an aside, I had a fabulous conversation with a German Service Company provider, Larissa XXX, who described in some detail how tenders obtain contracts with oil companies, including the importance of networking and its relationships to quality]
Dmitry Khlebnikov, Molten Group. Tools to support innovative development of the industry. Ranking a company based on a model for innovation. Usually, Russian companies rely on the innovation on foreign companies. Foreign companies typically rely only 25 percent on outside the shop technologies. Innovative strategies are not the same for every industry. Obviously we can’t do everything by ourselves, and we should not. But to understand who and how we should rely, a few categories, significance of the technology to our company, etc, and if we judge ourselves based on this model (slides) we can know what we need. Technological independence, if we think about it, if we purchase ready made technology, we take on long-term risks. We have technological dependency from companies. We have to create innovation. Different institutions, partnerships, universities can be involved, venture, Skolkovo, implementation of technology. Despite the fact, here are a few examples of good examples of partnership.
We need to communicate using our R&D initiatives:
Viktor Baldin, Chief Geoscientist, GEOSTRA Prospects of oil and gas presence in Gydan and the western part of Taymyr. Mainly technical, suggesting possible reservoirs. Reserves and assessment, preliminary assessment suggests this area has a tremendous amount to reserves.
Done with the list of speakers with just a few minutes before lunch, as originally discussed, let’s have a few questions or remarks. First question. Remark regarding the Gubkin University. You mentioned that a memorandum has to be signed. Let’s do that. Okay dear colleagues, the question was, why all the R & D organizations and oil companies do not communicate with each other?
We just view ourselves as competitors instead of cooperation, placing bids, we are not very well used to partnerships in the context of competition. As of today, major oil companies have 30 years of fundamental sciences and exchanges with universities. We do not put a long term forecast beyond a few years, and in comparison to Western companies R&D, they have 20 times more, and we have not adequately funded science. So there is not government policy and incentivizing R&D, yes, as to short term, but not long term. Maybe Skolkovo would like to comment.
Yes. Well, maybe the cooperation may not be at the extent we want yet, but there are a quite a number of companies that are getting together, and there is increasing cooperation, and finding some common ground, yes indeed we have such ground for cooperation. Question: To what extent is Skolkovo prone to cooperation? We try to do our best to be a catalyst for this approach, whether we have done it correct or not, we are not the sole initiators of this process, whether it remains a bureaucratic move (sponsored by ministry) or otherwise, we are starting it.
6/25 — Day One:
Russia’s Oil and Gas Industry: Responsibly Energising a Growing World
Getting Started: Chair, Pierce Riemer, General Director, World Petroleum Council/WPC, thanking everyone and reiterating his pleasure to attend. Vladimir Evtushenkov, Chairman, Russian National Committee of the World Petroleum Council / RNC WPC. Chairman of the Board, Systema, now stating that this is the only Russian oil and gas Congress of its kind, and that there are unique challenges, to assess prospects of business developments, to be discussed at all levels, and on behalf of the Russian government, “I would like to greet everyone involved to have successful Congress. Thank you for your kind attention”.
Kirill Molodtsov, Deputy Minister, Ministry of Energy of the Russian Federation. An honor and privilege to greet you here. If I ever tried to describe what is going on with one word in oil and gas, that word is “change”.
Last week in St. Petersburg, at the Economic Forum, President Vladimir Putin described these changes, and all those changes are visualized by us right now, what are we going to do, making an agenda, keep up — what forms those new trends. So this topic is worthwhile to discuss in the framework of the Congress, and we will talk about how the market of hydrocarbon marketing are being constructed, global bench marks, and as Lewis Caroll, stated in Alice and Wonderland, we have to run and lead the motion, and with the launch of Siberian sources, we have to lead the changes, shipping and pricing indexes, the global context, how to measure it, count it, how to proceed from transactions, OTCs, coal, crude oil, gas. Let’s get down to work.
Renato Bertani, President, World Petroleum Council / WPC. First of all I would like to thank everyone, and be very brief about the importance of Russia in the oil industry and global context. A few facts, looking back 150 years, fossil fuels, account for 80 almost 90 percent of energy consumed by the world. Looking forward over the next 40 years, all projections are that oil and gas will be the main sources of development for sustainability, 60 to 70 percent of global needs. Certainly in this context Russia is the most important sources of hydrocarbons, in addition to conventional sources, IEA assessed unconventional oil, Russia has the largest potential, 75 billion barrels of additional unconventional oil. The message is the next year here in Moscow, the 21st Petroleum Congress, giving Russia its importance in the global context.
Andrey Tretyakov, Acting CEO, Rusgeology. How to create funding, actively discussing public private partnerships, putting together algorithms for development of new territories.
Ivan Grachev, Chairman, State Duma Committee of Energy — you are expecting from me the brief address. I express my sincere respect. Common knowledge that half of our budget comes from petroleum. A private story, we argued with professionals what would be the pricing scenario, and there was quite a panic in government, and they tried to push through Duma a crisis package, channeling the surplus of money to bank accounts in the West.
Conservative accounts to about $90 per barrel. I chose $100 per barrel, why was I correct? My desire was trying to understand realistic trends, and I was sure there was not going to be a second wave of crisis, and it is my perception that current crisis theories are virtual theories, and that real and virtual indices are determining global forecasts, but we are entering into a new stage, and that there is no reason to believe we will be entering into a second phase of crisis, and I am absolutely skeptical about renewables and am 100 percent sure that oil and gas will keep rising, by what margin will be arguable, but these fundamental baseline ideas.
Allow me to make my judgement about markets. If we say that crises emerge at real and virtual worlds, there should be another financial bubble, and that the next global financial bubble will be shale gas and shale oil and gas. Absolutely utopia the idea that Germany will be self reliant on wind. If I come back to our Russian laws, our fundamental premise that oil and gas prices will grow, and that China will need huge amounts of net clean energy, these assumptions allow us that the huge costs of development of eastern fields are quite justified. Therefore, the Duma will make necessary changes to the law. One small detail, the existing system of predictions could hardly be said to be acceptable, the system needs a lot of changes based on fundamentals.
Valeriy Yazev, First Deputy Chairman, State Duma Committee of Natural Resources, Environmental Management and Ecology; President, Russian Gas Society, Natural gas and EU energy policy contradictions.
Thank you Mr. chairman. Forecasts to 2025. It is difficult to predict oil and gas markets, lacking are geopolitical considerations and internal politics. But OECD decides to restrict sources from non-OECD countries, difficult to determine. Changes, new refineries in Saudi Arabia, golden age of gas turns into renaissance of coal, and Europe forgets carbon free economy and embraces coal-based power plants, working in conjunction with wind, impacting our realities, we fail to use completely our fields in traditional production areas and push into Arctic offshore and eastern Siberia, and bust our budget.
I don’t share Grachev’s assumption that we need to go into Arctic and bust our budgets, we have plenty of untapped oil and gas sources and non-conventional, a big impact on global environment, but fundamental strategies should be proved. Controversies in natural gas, energy dialogue. Early this year, there is a need to transform EU energy policy, and create modernization, and create new partnerships with Russia. In Europe, gas prices prove to be inefficient because of high costs, and that prices earlier to the crisis were better than now.
Renewables made a lot of progress by spending 100s of billions of Euros, and through subsidies, and imposing their regime on the markets. EU gives priority to renewable, but conventional which serves as reserves without subsidy is not reasonable in my opinion. European gas market is in ruins, and is the ideal storm. Before the 3rd energy package was approved in Brussels, I said “let’s stop arguing since it is approved, but let’s look where we are after 5 years [of high prices]”. But Russia makes long term investments for Europe for its long term benefit, and Europe turns around and does not want to repay this investment, and is responding to shale gas.
Our experts should be protected against such scenarios. What should be our interest in Europe, if it wants to impose spot prices, or competition?
Russia does not create oil prices and has indirect impact on gas prices. Long term contracts are an inherent aspect of oil contracts, and follows an ideal model, but should be linked to some market pricing mechanisms. At the end of the day, economic factors and consumers will determine the situation. Russia needs to be flexible, the controversies, the pace of our economy, 3.3 percent or whatever, but even at 4 percent, we are falling behind, in balance of exchange. The capacity of our domestic market, does not increase, making our manufacturing less competitive, and purchasing power of households falling, we should decrease the energy intensity of our economy.
Fernando Valenzuela, Ambassador, Head of European Union Delegation to Russia EU-Russia energy relations. A great pleasure for me to participate in this conference. Pleased to share with you some views on oil and gas markets. Oil and gas are primary in the EU economy. Anticipate oil imports by 90 percent by 2030. Energy markets are changing rapidly, as already mentioned. The recent rise of LNG and Shale gas revolution in United States, continues to have impact on Global gas. Commenting on suggested changes toward natural gas transportation. Having LNG refueling every 400 meters. In order to retain this market share, gas has to be competitive. US coal exports to Europe has risen to its highest level in 17 years. Coal prices having fallen 19 percent. Gas electricity plants unable to compete with cheap coal are shutting down. Russia should reflect on this situation and be more sensitive to these changes. Russia’s economy needs reform, the energy sector, the economy requires rationalization and modernization. Moreover, increasing efficiency can open up more resources for export. The basic relationship between EU and Russia needs reliability, and Russia, while needs compensation for its production, also needs to become more competitive working within a sound equal framework.
Leonid Bokhanovskiy, Secretary General, Gas Exporting Countries Forum/GECF. Natural gas developments in the context on the new energy map. Gas Exporting Countries Forum (GECF). Members and Observers. US will be a lead exporter, Offshore Africa is up and coming. Climate change regulation is moving to promote gas. On the other hand, the falling demand in Europe for natural gas because of the financial crisis is affecting gas developments. Shale gas is creating new opportunities and cautions. Increasing exports are destabilizing traditional contracts (EU), there is some unfeasibility about the longterm politics of development in the United States. In Europe, UK, and Poland, shale gas is under review. Uncertainties surrounding ultimate availability and the environmental impacts of energy production. The GECF represents the highest level of activities and vision. Second meeting will be in July 1 in Moscow.
Vladimir Kornev, Executive Secretary of the 21st World Petroleum Congress; Director, Russian National Committee of the World Petroleum Council / RNC WPC, Russian National Committee of the World Petroleum Council: 55 years – results and prospects. Talking about the history of the WPC Council. From the very start, the Russian national committee was established by 14 legal entities. First and foremost, we represent the interests of our countries within the framework of the WPC, taking into account interests of other countries, realizing our activities promote the Russian oil and gas sector. Back in 1971, the Soviet Union hosted this conference (shows a video). Basically talking about the conference coming up and how anyone should participate. Let me remind you that we have a stand on the second floor, and we will celebrate the initiation of the congress with you.
Alexey Kontorovich, Member of the Russian Academy of Sciences, Chief Scientific Officer, A.A. Trofimuk Institute of Petroleum Geology and Geophysics, Siberian Branch of the Russian Academy of Sciences, The first decades of the 21st century – Russia’s role in world energy markets.
EXPERT DISCUSSION Strategic Alliances In the Global Oil and Gas Industry: Prospects and Challenges — The importance of strategic alliances for developing exploration and production projects and technology exchange ▪ International oil and gas projects with the involvement of Russian companies in Russia and abroad ▪ Transformation of the global hydrocarbon supply structure in the context of BRICS strengthening ▪ The role of international technology exchange in developing offshore fields
Moderator: Igor Vittel, Producer and Host, Observer TV Show, RBC TV, asking questions.
Experts:
Genadiy Shmal, President, Union of Oil and Gas Producers of Russia, gets a souvenir for being good at what he does. Turkey is involved in major projects, and any unrest will have some effect and will impact regional situations. Moreover, Turkey often acts on both sides, gives support to projects, but laying out alternative projects.
Anatoliy Dmitrievskiy, Member of the Russian Academy of Sciences, Director, Institute of Oil and Gas Problems, Russian Academy of Sciences, talking about the massive changes in shale, Gazprom lost 15 percent of its shale gas sales in Europe. I made presentation in Europe some years ago, and asking why Russia is allaying its pipelines to Europe when Europe is producing gas on its own. And in 1997, we began to suggest that we should be pushing East, but we should have done it earlier, that we should be shipping gas to China, while European price remains low. We’re used to the fact that Europe needs gas and we have gas, but Europe is becoming a buyers market, what will be oil and gas prices for gas, it would not be indexed to oil because gas prices are falling. We have difficult negotiations all the time.
Igor Vittel: We know for certain we are trading at a loss to us, as far as I understand. [Dmitrievskiy takes a phone call] Perhaps [Vladimir] Putin is calling you.
Tatyana Mitrova, Head of the Oil and Gas Department, Energy Research Institute, Russian Academy of Sciences. All prices are created privately, the terms and conditions remain confidential, that the market is somehow creating some kind of natural economic price. You cannot expect to have a monopoly over an expected price. Aggressive pushes by Iraq, shale in US and decline of oil prices.
Vittel — If we look at the driver of global demand, China, if we look at the horror of the bubble that was supposed to create decline in oil prices, which is now about to explode, and we will see a rapid decline in oil prices and the Russian government will suffer.
Mitrova — Our economy is sensitive to slight changes in oil markets and from perspectives. The costs in Russia are 2 to 3 times higher than are competitors.
Vittel — Now Shale revolution is a good thing for Europe, though it is bad for us, even though the European shale project failed in my opinion, the Japanese in depth drilling, to what extent, new technologies of production can reshape the energy market, while LNG intended for US from Qatar, and found its way to Europe, talking about Angola and Nigeria, certainly intended to cut off China from encroachment on resources.
Valeriy Bessel, Executive Vice President, NewTech Services; Professor, Gubkin Russian State University of Oil and Gas — There is not a single country in the world that does not suffer from a need for oil and gas, it is a buyer’s market, but shifts occur. All predictions, BP, about Shtokman gas should be going to United States, now US is exporting. Venezuela is 100 percent linked to United States through oil sales. I don’t understand why they are dividing there. Disintegration of Soviet Union, we actually disintegrated a very powerful country, and 2.6 dollars per barrel for Rosneft, back in the Soviet Union. Rosneft has partnership with ExxonMobil, and the Russian budget may not survive.
Vittel — You should be careful, we just had the president announce the transnational railroad [laughter]. [Pause] Chinese economy will have a rapid decline with implications. I fully agree with the bad implications of the disintegration of the superpower that we were.
Vitaliy Yermakov, Director, Russian and Caspian Energy, IHS Cambridge Energy Research Associates/IHS CERA.
Over the past two weeks, I’ve been hearing the same thing. China will sooner or later will go into rapid decline. I am somewhat taken aback by this forecast, and we have decline of the economy what does that mean for us, if we compare with GDP in China. Of course China is ahead of everyone, in 20 years time, they will be so ahead, no one will catch up. The growth of the population, requires economic growth, providing energy resources. All the consultancy companies testified to the economy is reshifting from traditional centers of growth. But the slow down of growth does not necessarily mean that energy growth will decline. They have a traditional approach to the market. They supply from long distances, lengthy pipelines. Exporting LNGs, it becomes quite obvious, that possibly to have LNG floating facilities, as a global model.
Vittel — Everything is against us. Will the government recognize the problem and embark on some interesting decisions [will some decisions take place]. Irina?
Irina Esipova, General Director, Centre for Communication Development in the Energy Sector. Well, in St. Petersburg, Mr. Putin announced that we need some kind of one stop shop center of energy communication. But the Chinese tend to say that every Chinese citizen eats one brick stone within one year period. They are advancing technologically, and penetrate into the Russian European market. Of course we have to face this challenge with courage and if we speak about the influence of the reputation of this country, the ITC, it is all very complicated, the only company active abroad and positively perceived, is the Lukoil company.
Valeriy Yazev, First Deputy Chairman, State Duma Committee of Natural Resources, Environmental Management and Ecology; President, Russian Gas Society.
Influence of the Reputation of Russian Oil and Gas Companies on Russia’s Position in the World
[An unusual panel. Last week in SPB Economic Forum, there was discussion on “perception” of Russia boards of directors. In this panel, perception of Russian energy companies was the main topic, ed.]
Panel chair, Irina Esipova, General Director, Centre for Communication Development in the Energy Sector, begins with a “positive surprise”. We have Konstantine [?] who receives an award as best journalist, correspondent for energy world energy journalism. Now, modern technologies not often used in our oil and gas companies. Only Lukoil is trying to enlarge its reputation in different companies, and has its emphasis on self representation.
Speakers: Natalia Grib, Head of the Analytical Centre, Gazprom Energoholding, speaking of Russia’s position in the international oil and gas market. Recently I see an increase in content in the media. Several years ago, we did not have a panel on how to present ideas, sometimes people would communicate. I think this is a huge step forward. Peculiarities of information flows in different territories that reflect oil and gas market trends. I have been writing 15 years with more than 3000 articles. My presentation to enlarge your views, if the journalists are here, they would not use my information, because it is open. How can we interpret information. Already the 13th year that it is losing its position, has now only a 3rd in the world.
Part of a huge global industry that influences Russian companies. These things are linked together but do not know how to use these tools from a PR point of view. I can recall yesterday, presenting forecasts up to 2025, only BP gives forecasts up to 2030, only in 5 years, there will be hardly anyone asks for the Lukoil forecast. In 2012 declined to 35%, BP experts say that coal is rising, energy of all developing on coal. The fundamentals of coal and gas is starting to rise into oil. Only 2 percent of renewables. If is for you to understand what we are living in and who we are working for.
Oil price was influenced by different factors. Sanctions against Iran, planned production declines in UK…. From speculative factors, so you as a company can influence the market, you can place news so that folks understand what is happening. US is trying to minimize imports, in Europe, there is slight decline, in China, you can see the increase of oil and gas imports.
If we try to enlarge analyze basis, include shale, condensate, etc. Russia is in first place in terms of all liquids. So it all means things are based on representation. Same information represented in different markets have different outcomes. USA will always reiterate their market is always doing well and imports are declining. During the last 5 years, they declined light oil fractions, but increased heavy oils, the import structure is being changed, they usually show that import of light is being declined, but when I hear the Russia decline, that Russia does not have enough of gas, this forecast is not true. Gas generation in Europe is in decline in favor of solar and gas, but it was not forecast, a scenario, that all forecast would not be correct, so what is the difference between forecast and professional speculation. Natural gas prices highest in East. US, power plants are built for the cheapest source, natural gas, in Europe it is built for coal and LNG. Situation in Europe reflected on major oil and gas companies.
Larisa Ruban, Director of the Dialogue Partnership East-West Centre, Energy Research Institution, Russian Academy of Science. Expert forecast for the energy sector of the Asia-Pacific Region and Russia’s place in this region. We performed an international surveys of professionals, decision makers, we asked from 16 countries in Eastern regions about consumption. China, India, both are big energy consumers and increasing. Experts provide their evaluation on demands of energy resources, and transportation and risks of conflicts and threats.
When we talk about image, in the Pacific basin region, ranking countries based on leadership possibilities. No production without stability and safety. Only 13 percent of experts believe there is the possibility of world conflict. And over 70 percent believe it is low possibility. Image of Russia—What is the role of Russia in the far east, 46 percent says we have lost the position, behind the economic development in the region, even though in the past it held a higher position. Russia is a middle range player. But is increasingly changing its position and can work in the Far East, though skeptical. Chinese experts say they are stressing cooperation and not unions. They feel that Russia is very strong in oil and gas production, and the attitude is better toward Russia than USA.
Russia wants to play a leading role in Asia, but without the power to do so. Last year just 11 percent of experts felt Russia was a global power.
Yanina Dubeykovskaya, Co-Chairperson, Programme Director, “Communication on TOP” Communication Forum in Davos. Does energy need publicity? International experience. Came to Davos to organize energy. Of course we know that communication development is transparency and openness. The world is digitalized and outcomes of transparency cannot be predicted. The main measurement of efficiency of communication, and what influences our decisions. If our company is efficient and use of communication tools. First rule is competition. In China, internet is regulated by State and positioning of experts is totally different. Whether a company sees internet as a strategic tool, communication models based on b2b/b2c, private or publicity of the company and the first person in the company who is the main decision maker.
Systematic changes- even if we are not personally linked into internet digital, but more and more, the company’s image is influenced by the internet, communication is global and quick. If 10 years ago we needed to restrict information to a certain audience, today it is less and less our role, because it is impossible, we lose the reputational goals because it is impossible. From linear to cloud communication. If you do not have twitter, you will have a problem. Probably there can appear a person, the person starts influencing… local audiences.
Information is changed to a social phenomena. Not a simple logical structure, we need to involve people so that they share your values, we don’t inform any more, but involving people. Packaging of the content, a story, with a plot, a hero takes place of the abstract company, and you know that a lot of companies give a public face. Presenting the image of the company. All this data is influencing the fund market and creating reputations and this is the companies evaluation. The question is whether the companies image can create a positive image in investment society, create credibility. In energy sphere it is less presented, whether it can be applied to the energy sphere. I am a transparency addict. Having worked in the energy sector, it can be up to your personal principle, but whether required by market. It is not everything that much to the energy sector, but even this conservative sphere, that energy companies use naming to transparency and this new challenges presented markets information policy. Should be quicker should be wider, and we are for anti-crisis communication. If we need to always talk minister of emergency and understand the tools. The whole of the reputation is not only the company. The concept of reputation that haven’t even thought about. World energy brands. Internet channels. Lukoil, that is presented in digital channels. New trend of energy company, I could not find it. A few good on line channels, you tube, presentation of first persons in the company, Gazprom project that has 20 thousand viewers, a good thing about internet, it calculates statistics. We can see site traffic it is a good measurement of involvement.
Energy industry in general, is still very closed, when something happens, a crisis, there is a lot of unstructured information in media, and that is the specificity of the industry, if it is conservative, and should correspond to the changes of industry.
The image of the person should represent the main person of the company, they inform this or that about the company, the spokesperson places them into the spot light. And the person who has this function of the evangelist should have a talent of the digital auditorium.
Irina jumps in: Top managers do not represent the new understandings of the current situations. We provide a new forum to create a new set of understandings.
Alexey Fisun, Head of Reputation Research, United Minds International. The reputation capacity of Russian oil and gas companies – The topics of oil and gas are gendered, now I’m studying the male aspect of the corporate image, doing this now for several years. Analysis of expert opinion. I developed a system of reputational capital and present results related to energy industry. Why do you think Russian companies are interested in their reputations. In general. Crisis, catastrophe or if they have enough spare money. When the companies are going to place their assets on the public stock. Reputation when we need to attract investments. Different reputation than Dosteovesky or Pushkin. Reputation becomes material, and we need to assess the efficiency of PR services, or when PR is working really bad. We evaluate different industries – general assessment of industries, leading 20 companies? But are you from analytical sectors, when you have to deal with your reputation.
Index of reputation. Energy would be more than 5, the reputation of the business is not really high. Among this rather low evaluation, the energy complex, only gives way to high tech. (www.rep-capital.com).
What industries are more immune to crisis. Fuels are a little higher, (railways are more reliable than oil).
Answers of the experts
(1) bases of resources (2) connections with authorities. (3) Etc. look at slide (9) transparency of company…
Where in this list of the image of the company and reputation of the company. We are talking about what is related to reputation, everything is related to reputation. But nothing is related to reputation. Reputation in energetic company is not included. But what is a supplement for reputation for Oil Company – “Administrative Resources” no. 2 and no. 1 (being capable of stating factually what the company has in the ground).
We keep asking: financial factors. Business strategy, ethics of business, ethics of business (7th position). Corporate responsibility on the last place. There is a slide there that looks like a spider web. And this is about reputation. Connection of reputation of a company with shareholder expectation. General evaluation comes up to 42 percent.
Russian Company reputation. Somehow the scene in which they float is impacting the quality of fish itself. So the main importance and evaluation – gives us a tool to think about (www.united-minds.ru).
Vladimir Bachishin, Professor, Slovak Law University; Partner, Bachishin & Tkach Consultancy, Slovakia. The perception of Russian oil and gas companies in the European media –Analyzing media space assessing Russian oil and gas companies. Content analysis. A lot of definitions. Talking about linking personalities to gas developments in different areas.
Fiodor Klimkin, Press Secretary, LUKOIL Overseas. The image potential of Russia’s oil and gas businesses abroad through the example of LUKOIL Overseas projects – key factors that can impact and implementation of image potential, Lukoil overseas, three factors, 1, implementation of mega projects, 2, social charity of company, 3, efforts of the company to promote the brand.
We’re the largest investors in Iraq. Invested 2 billion in Uzbekistan, and up to 7 billion more in gas projects.
Second factor. Social – we organized events, not so big, but targeted, equipped school with desks, computers, football stadiums, Lukoil in Kazakhstan. Third efforts to promote the brand, ecology safeguarding. Investigated respondents after a lukoil video in British television.
Alexander Goriunov, Press Secretary, Deputy Head of PR Division, Itera International Group (of companies). Conditions and factors for Russian oil and gas companies to build their reputation—we started working with Rosneft, and shareholders are considering selling our business. We have something to tell you after 20 hours of business. Originally we had corporate responsibility. Sports projects resolve issues in certain ways.
Bicycling—the main shareholder was always interested in bicycling. Was on the Russian Olympic team, and company was called Katiusha. Also elected to the bicycle sport. The president Putin called him and asked him to take care of the country’s bicycle sport. Initiative that is to promote bicycle sport values and abroad. In Europe it is very popular. It became kind of an initiative.
Katiusha is one of only two teams that does not take the name of the sponsor (all in Europe?) how we promote the team, and how we resolve the issues of informing society, visualization and branding, lost in translations and broadcasting, working with media and new papers. Media interested in bicycling in Europe more than in Russia, so they can use bicycling to promote its major issues. Facebook, twitter – all language is in two languages.
Hockey – great way to resolve our image issues in this country (Riga), we all know how much you invest defines how well you place. Most important thing for us is this sport type is international, we support international competitions, we create our image of international company.
Fisun – corporate and state responsibility, you showed a good example, when the president called the company to ask to do something.
Denis Terekhov, Managing Partner, Social Networks Agency –Social networks and the charity sector as tools for corporate reputation building in the fuel and energy sector.
No one can distinguish coca cola from pepsi cola, you have to distinguish yourself. Are there still Nokia users in the audience? But tomorrow don’t bring clean water to poor people.
It is clear that social network these are sales. Citizens of the little towns, 20 percent discount. Social media. Why many men here wear ties. It is a matter of formality, [now it is] strange to not to have a site. Not to have a public company, a channel of communication. Social media. Monitoring, you are overhearing what is talked about you during the previous year. So we do surveys to see what is being said about a company. On internet, we can see a great deal of the population.
Lukoil president in a driving accident, and they should have developed a digital reaction to it. If you have at least one attack, on the internet you need to be ready. If there were before sometime to think, you have not time to think. The press are with you whenever you are, in the taxi, in the train, it is not understandable where journalist ends and where bloggers end. You should work on the same logics as the bloggers, when you have to deal with 20k bloggers you can influence with them in anyway, like you could have done before with journalists.
In any company you need to create a united point of entrance – one input and one output. If there is an article in some far away town, a blog can be very important to a company.
Andrey Purtov, Producer, HiBrand International Conferences; General Director, ArtGraphics.ru; Managing Partner, Plan & Business Business Development Agency; Coordinator and Teacher of Branding, British Higher School of Art & Design The visual image and reputation of Russian oil and gas companies.
Kirill Melnikov, Special Correspondent, Kommersant Daily,
The media – supporters or enemies in building the reputation of oil and gas companies?
6/24: Folks attending from different sectors — global gas development, Barents sea development — intersecting in one place. From previous Paparazzi Ethnographic blogs:
Tatyana Mitrova, Head of the Oil and Gas Department, Energy Research Institute, Russian Academy of Sciences; Vitaliy Yermakov, Director, Russian and Caspian Energy, IHS Cambridge Energy Research Associates / IHS CERA; Thor Christian Andvik, Project Director Barents Region, INTSOK/Norwegian Oil and Gas Partners.
Posted in Paparazzi Ethnography, tagged St Petersburg on June 18, 2013| Leave a Comment »
Forum website, sponsored by FSU
Saint Petersburg, Russia
Epilogue: I had the opportunity to reflect on the International Forum while strolling the Neva river bank and with Julia Smirnova, marine geologist (aka Miss Polar Lows).
As I explained to Julia, the forum reflects a gathering of glad-handing big shots whose lives are out of touch with everyone else wandering the city streets. But it is also a specific occasion for a collective of events.
At the SPB International Forum, new participants are enrolled into frameworks of understanding, truths emerge even as disagreement and distrust remain.
Attention to certain individuals (career, attitudes) intensifies.
There is continual display of fleeting phenomena (modes of talking, attire), over which various actors converge and publicly declared their interests. It is a public relations moment for different interests.
In short, the Forum represents (and reproduces) a formula of need, that reflects the nature and degree of interdependences that hold together various persons and groups — forming, in this case, Russian economy – interdependencies that always require the so-called owners (State), de facto owners (oligarchs), investors (businessmen), and so forth.
At the time, during our conversation, four possibilities emerged from my own thought about the experience: (1) The Mirror of Media Democracy; (2) The Space of Governance through Reflection; (3) Hard [Business] Truths; (4) An Event of Our Time.
6/22: Enhancing Russian Corporate Governance Standards.
This panel was well attended. I sat in the front row next to capital investor Drew Gruff, who has been in and out of Russia for some 20 years. The meeting focused on the problems of recruiting high quality directors for company boards with participants giving a range of suggestions, including implementing American standards that ensure honesty, integrity, and personal liability. Olga Dergunova, Deputy Minister of Economic Development, Head of the Federal Agency for State Property Management of the Russian Federation, was the moderator and began the discussion soliciting new proposals for changes to the Corporate Governance/ Behavior Code.
Dmitry Pankin. On the backdrop of the financial crisis, a lot of information about how management should develop, renumeration has become key, a central topic in discussion of amendments to corporate behavior code.
Definition of independent directors, what are criteria of independence of board members, what percentage of shares can be owned by an independent director to be recognized as such. Another issue is disclosure requirements, how does a company disclose information (to shareholders), alternatives include companies not providing sensitive information that may be deemed as damaging the company, we are still collecting comments. Question by Andrei Bugrov, Deputy Chairman of the Board of Directors, Non Officer, Member of the Management Board, Interros Holding Company. “What part of what you said applies to state owned companies?”
Olga speaks, Corporate Behavior Code, which will be replaced by Corporate Governance Code, will provide more detailed language for business ethics. But how is the current level of governance appreciated by international community?
David Gray, Managing Partner, PwC Russia. The new code is a good step in the right direction, but there is still this perception that Russia is still a place where normal standards are absent, but Russia has made a lot of progress in the past few years, especially in the quality of directors. We have a board survey every year, and a key issue is the quality of candidates in the board. Lack of depth in corporate Russia, especially human capital, technical or financial persons, improvements around the quality of directors is a very practical step.
Olga: Quality of corporate directors is important. Andrew Bugrov: One of the realizations emerged from financial crisis, the importance of independence is exercised, but at the expense of expertise, extremely difficult to enroll qualified directors in the boardroom.
Ronald Freeman, Independent Director, Member of the Audit Committee of the Board of Directors, Severstal. If I can add, I am always surprised how self-critical Russians can be. The best Russian corporations have closed the gap between what is written in the code and behavior. How have they done that? The best Russian companies, they want to hear, they demand a diversity of viewpoints, and I’ve seen them change their minds in the course of board meetings. On the other hand, Board of directors have to be prepared, they need to come in ready to do the job right, extremely demanding, preparing. We need to talk more about government of government.
Olga: Quality directors, the ability to get ready and analyze the outcomes on a regular basis, is the second major factor of a quality board. Where is that incubator that can put out directors, not just for Sberbank, but for the 2500 other companies that require independent directors? What is the essence of approach for putting together a quality group?
Dimitry Peskov responds, we do an open procedure, there is an option to file an offer or bid, we look at the competencies of the person, if we can track that down, you can offer tasks for those people, and can identify their clearest manifestations of competency, we more or less understand the competence of an industry and can therefore model a board of directors, whether be charged with making a certain decision, making a foresight, and based on that, persons from all walks of life can be selected, and then we need to balance them in terms of ethical qualities.
Andrei: Is there not a corporate universal exam [referring to Olga to ask how does the state select their board of directors]?
Olga: We have as the state, 2014, independent directors, and we saw that there is corruption in that certain individuals want to work somewhere, and also expertise in one area does not always translate into pragmatic competence. So we came up with a basic set of requirements, certificates of education, chartered experts, and comparing all those requirements, and looking for financial and economic experience within the requirements of a company, but government requires a more universal approach to the selection process, and requires having a system put in place, of codes and laws of professional conduct. Alexander, what advice would you give to corporations to satisfy investors?
Alexander Afanasiev, indeed, we are interested in directors, the project to develop the new code of corporate governance is of interest to us, because we are pragmatic beneficiaries of the process, openeness and transparancy of markets provides access to funding. You have to convince shareholders, lenders, government officials, corporate governance plays an important role. According to my personal experience, perception, how you think about the market, lags very much behind in Russian markets, a legacy from the Soviet saying, that the office is stronger than the industry, but we have made advancements quickly, obtaining and protecting assets is not a formula for openness.
Now it is different, owner is separate from management, and owner, shareholders and managers. Here the concentration of capital is high and securing the rights of minority sharelholders is high. Good corporate governance pays back. There is a certain premium for corporate governance.
Olga, continuing on the thesis of listing, information about the company, performance, transparency, not only increasing opportunity to take loans at lower rates, and here my question is to Albert, the NYSE is stringent about reports, and the sanctions when they are found invalid, and what would you recommend.
Albert Ganyushin, Head of International Listings, NYSE Euronext. Both in US and Europe there are very strict standards. In Russia, a European approached based on OECD is more widespread. The US described: a set of rules is quite narrow, but you have to ensure 100 percent compliance, why is this system good? because it raises the corporate governance to a minimum capital level, which creates a mark below that you cannot operate, as a result, the US is the most developed in the world, why was it done?
Strict compliance with minimum standards, provide valid reporting, and there are no other approaches in the American market, what does that mean in Russian market, I think there should be strict compliance. The head of a company should sign a paper and state he will not lie.
And if a company is ready to do that then the company is ready to operate. Since Russia prioritizes building an affective capital market, the process could be accelerated, and the process takes some time, but could focus on a minimum standard. If you own the company you can make your own rules, but if you want to attract investors at a low price, then the minimum set of standards could help. One more thing, companies in Moscow and NYSE, we advocate that we work together and there shouldn’t be any problem following these problems and that helps promote corporate culture.
Q: Andrei Bugrov, what are the most common mistakes? A: Usually, companies choose too many indicators, which is useless, and make people aware of indicators, and that they have to work within a framework, when the system starts operating, the main thing is not to go mad, because the system starts providing so much information, and it takes a lot of time and effort, and so has to avoid erroneous decisions, however, nothing more successful has been invented yet.
Freeman, adding, good board acts like a good string quartet, board effectiveness, you know what it is when you see it. Directors can be dismissed on an annual basis and retained collectively. Andrei, reaffirming that Freeman’s comments are important.
Michael Kleinemeier, President, SAP in Middle and Eastern Europe, Maksim Krasnyih, Director for Russia and CIS, Intel Capital, Andrei Volkov, Rector, Moscow School of Management Skolkvovo
Russia’s Green Agenda: A Sustainable Approach to Drive Russian Productivity and Competitiveness. Speaking now is Sergei Yefimovich Donskoy, Minister of Natural Resources, speaking of Russia’s adoption of a state plan for green initiatives, “Arctic zone development” — a road map for environmental regulation, focusing on mitigation of previous environmental impacts, recycling and modernization of industry.
Law on technological regulation and incentives, less red tape, use of electronic data bases, oversight performance of regulation, for environmental concerns. Safe handling of wastes is another important issue, requiring decisive measures or Russia will become a “big dump site”, establishing a new industry for treating solid waste, requiring changes in legislation, adoption no later than spring 2014. Also within our green policies, protection of Baikal lake and surrounding areas. Key areas of the nation, environmental impacts, every year a billion tons of waste, hundreds of thousands of hectares, putting in place a list of priorities for 45 regions, allocation 120 billion rubles, total investments in environmental sector will increase to double current rate, seeking to clarify areas for efficiency of investments
Andrei Elinson, Deputy Chief Executive Officer, Basic Element, Chairman of the Board, Basel Aero. Our own 70 person working team has been evaluating current legislation, continues with a legacy with command and control. An average permit in the current system require 1-1.5 years, whatever enterprise, you need to fill out hundreds of documents. Issues like “damage” does not have a precise definition, with more than 1500 regulating documents, describing various relations of various bodies in the country. Competitiveness should be a main driver in greening the environment and many companies are moving toward environmental awareness as part of their development models.
Sergei Donskoy, Minister of Natural Resources, apologizes for being emotional, but reasserts that environmental legislation requires attention. Isaac Sheps, President, Baltika Breweries, Senior Vice President, Eastern Europe, Carlsberg Group. 40 percent of waste revolves around packaging, so we have been looking to recycle and reuse for new packaging, the brewery way of sustainability. Clusters of sustainable industry around our brewery, establishing glass and can factories near the brewery to save on transportation costs in recycling.
Alexander Chuvaev, Executive Vice President, Fortum Corporation, Russian Division, pointing out the modern capacities of electricity generation in Sweden, and increasing reliance on natural gas.
Natalia Khanjenkova, Managing Director, European Bank (EBRD) Russia. 240 billion Euros to bring Russia up to environmental standards equivalent to Europe. Russia consumes energy 2 or 3 times more than other countries.
Evgeny Schwartz, Director of Conservation Policy, WWF Russia. Global economy is indeed globalized. Environmental sensitivity in Russia is especially visible in Russian forestry, industry is very supportive of environmentalists, why it is important to treat Russia as a global basis, positioned between environmentalist Europe and not so environmentally sensitive China, consumers on one hand and producers on the other hand, China is beginning to demand sustainable timber products to meet European Union legislation surrounding environmental protection involved in production for imports.
Oil and Gas, and Mining, needs work, the worst industry is the financial segment. The bill currently being reviewed and discussed (environmental legislation) — categorizes projects, assessment of environmental impacts, should protect small and medium business interests.
James Rosenfield, the right path for Russia is that one unique for Russia, looking at a global scale, start with the point made by everyone here, of energy efficiency, the 5th fuel at CERA, efficiency, Second, great energy technology contributions and enthusiasms for that, Skolkovo start up village, privileged to present on renewable, and sat through 50 start up businesses on renewables, and amazing to see what Russian technology has to offer the rest of the world, and that prime minister Medvedev attended, and that leadership has to start at the top, so having Donsky here is important.
Great rebirth of renewable energy wave, 1970s, response to oil shock, small scale, but today, massive worldwide build up of modern supply chains, creating massive electricity generation all around renewables, while in emerging markets it is 15 percent of green energy, one trillion dollars in past 3 years invested in green energy, meeting climate concerns but also growing energy demand, and that response to fears of peak demand, but also more recently a reversal in green energy because of financial meltdown and shale gale has a powerful mindset on the concept of scarcity, growing awareness of hydrocarbon abundance, and the “green spread”, the costs associated with renewables, is widening, originally had thought to decrease, and there is a reconsideration of renewable energy. On the supply side, an over supply of renewables, solar and wind have twice the capacity to meet demand, and we’re seeing consolidation in industry, with prices dropping for solar, and also a change in attitudes in Silicon Valley toward greentech, as folks settle in to longterm advances.
60 countries are invested in renewable portfolios, and emerging markets are more interested, however, “economic competitiveness” is continually driving the discussion around renewable and environmental developments, and this is having an effect in Western Europe, with Germany industrial community requesting a relax from high cost decisions surrounding supply. 10 percent of global capacity by 2025.
My big recommendations, besides the cornerstone of efficiency. Focus on remote off grid sectors, Vladivostok versus Moscow, second, rationalize structure, you have heat and no power, third, solid waste problem, use technologies for energy generation; next leverage your low cost gas resource, a myriad gas enabling technologies, finally, leverage your competitive advantage in science and technology in R and D, material sciences, bio sciences. The green story will take some time to unfold in Russia, but when it happens it will take place very quickly. With patience and time you will see a different energy future in Russia.
Keynote Speeches
Vladimir Putin, responding to comments, including in the New York Times today, that Russia continues to not be the best environment for foreign investment. In the key note, Putin responds to these concerns, by stating he/Russia is committed to protecting the rights of minority investors, create tax incentives for citizens to invest in capital markets, modernize financial regulation, curb offshore financial instruments (offshoring of world economy).
Here, Putin mentioned a number of energy infrastructure projects, including LNG terminals and increased movements of oil and gas to China and Asia. Accessible bank credit especially for SME’s, giving banks opportunities to lower costs from removing regulatory accounting procedures. Creating a better more reliable business climate.
Our investment image and internal perception, depends upon our (government) actions to improve business climate “de-penalize” commercial disputes, at the judicial level, municipal and state bodies, unite supreme court and arbitration court of Russia, intend on asking parliament and judiciary, to establish a “business ombudsman” with certain powers for defending the interests of the business community in relation to government, including suspending acts taken by municipal authorities, giving class action suits [?].
Yet another government proposal, to declare amnesty for certain individuals who have committed serious offense of the state, money counterfeiter, Draft amnesty, has been read by the business community. According to this draft amnesty, crimes related to entrepreneurial activity, economic amnesty not only restores justice, but a chance to reorganize a space for entrepreneurial institutions, respecting entrepreneurs and law.
Human capital. Health care and education, social changes in economy… abstract figures of industrial growth should not be our ultimate goal.
Angela Merkel is up now, talking about globalization, how it can and should be shaped. Working toward the G20 coming up, and emphasizing global free trade, accept competition from all over the world. European Union, Free trade region established between EU and USA, drawing down barriers to trade. Russia also wants to establish ties, to EU, USA, Pacific region. Germany wishes to support Russia’s efforts to diversity its economy, trade increasing between the two countries, especially in the energy sector, the energy mix will depend for a very long time on natural gas, of tremendous importance, Nord Stream, a forward looking project for energy transportation, a “truly European project” — Gazprom, Rostneft, we are also having German companies in the exploitation (upstream) here in Russia, standing ready to cooperate very closely.
Looking for transparent rules in business development, and here Germany can be a good partner, of tremendous importance, in the long run, we can only be prosperous if the entire of EU is prosperous, Russia always stood by our side, making a commitment to the Euro, and we have shown in the Eurozone, that politically, we have committed ourselves to the Euro, though trust from investors had eroded during the financial crisis, whether countries could repay their debt.
Management of economies, sound fiscal policy will loom large at the G20 meeting. Competitiveness, each country will need to prevail in competition, structural reform, respond to sound fiscal policy, that each country requires to reclaim competitiveness. Lending is a big deal in SMEs, and set up a particular lending institution sponsored by the government. Economic coordination, research and development, unit labor costs, cannot be great disparity within the EU zone.
Arguably, the high unemployment rate among young people, is the most pressing issue in Europe. Greater need for coordinated labor market.
Zhang Gaoli, Vice Premier, People’s Republic of China. Allow me to congratulate you on the successful opening of the forum and stimulating global economic growth. There are certain positive changes given uncertainty. We do not have enough drive behind global economic growth. Undertake steps to support open environments (business), international trade based on free and rational exchange.
Q & A. Economic Summit. Serious reaction to US Federal reserve board policy.
Putin — what Russia should do is covered in my remarks. Adjustment is needed as some point, esp. with continued liquidity in the market, and it is not right to expect the world to follow America’s ongoing series of fiscal cliffs, including reducing debt burden by the Fed, which Obama did respond to at the G8.
Merkel, responding to policies good for Germany not necessarily good for Europe, making a brief comment, referring to the previous comment about Bernake, that high liquidity was the cause of the past financial crisis, but the reaction shows that we are not back at full balance. But actions of the Fed should not be creating such global fluxes, but just points out how global changes are dependent upon global banks. Secondly, the big deficits suggest that sovereign bonds are nothing to invest in.
Question: Potential exports of natural gas from the United States, projected flat demand for gas in Europe and high prices for natural gas in Asia, suggests that Arctic oil and gas for export to Asia make sense, but requires technology and investment. In the Barents Sea, a number of Norwegian and Russian workshops suggests that Russia is not open enough to foreign investment and partnerships in the Arctic development sector, can you comment?
Daniel Yergin Question: how do you see developments in oil and gas and what is Russian strategy for handling new developments.
Putin: I do not see any cardinal change. US shale gas affecting economy today, but fundamentally we have not seen big changes. And that shale gas is creating more problems that fundamentally changing the price. I do not serious change, but cardinal changes in technology would be best, we should assume that cheap energy will not be available and new technology.
6/21: Day two. Energy Club Summit: Reshaping Global Oil Markets. Moderator, Dr. Daniel Yergin. I have yet to obtain tickets to attend this meeting. Only special invitation is allowed. I view it on one of the screens, or in this case, on front page of the SPIEF which has a live stream of this event.
Already one hour late in getting started and any later, it will overlap with the main event of the day, which is a key note by Vladimir Putin. I met Yergin yesterday. We spoke briefly about what I am up to. Years ago, I worked with the Alaska governors, Tony Knowles and Frank Murkowski. We engaged with CERA. On a few occasions, I lunched with Knowles and Yergin.
The Economics of Managing Major Catastrophes. Moderator, Margareta Wahlström, Special Representative of the UN Secretary General for Disaster Risk Reduction.
Context, Economic impact on industry of catastrophes, obviously, taking this panel from the private sector perspective. Costing enormous values economically, socially, politically — with aspirations for economic growth, that creates catastrophic future risk, disaster risk accumulation in East Asia and economic growth curve, who pays, how do we manage increasing global context and abilities to build resilience.
Business is lending toward higher risk regions, how do they think about risk, do they calculate them into their investment decision making, what are their instruments, what is the collaboration between the public and private, where is the leadership coming from, what are shared values.
Vladimir Puchkov, Minister of the Russian Federation of Civil Defense, Emergencies and Elimination of Consequences of Natural Disasters. Infrastructure bigger, new branches of economy, bringing IT to most remote places. External factors are different, climate changes, emerges of new risks and threats, earthquakes, tornadoes, etc. requires taking under many factors.
We are taking all necessary measures to minimize risk. Putin has approved strategy on G20, for security, NGOs also very involved. In order to implement this strategy, state system on prevention, unified system of 83 regions of Russia, involves early detection of threats that may emerge. We have build a modern regulatory base just three years ago, and today more than 3000 enterprises in FSU have been required to decrease risk. Step by step we are reducing the number of non-liscensed activities. For example, if a CEO takes on certain obligations on he files [?].
Sochi Olympics, for example, many different security professionals were involved during different stages, construction, etc., safety and security. Establishing the reserve systems (reserve fund) operating in the area risk reduction, providing necessary help for certain regions, and money subsidies to populations, entitling folks to 10k rubles and up to 100k rubles for property loss.
Reimbursements cover immediate needs in the wake of disasters. Educating populace about disaster mitigation (threats, natural disaster relief). International cooperation for forecasting disasters and risk management issues, shaping new models that effectively allow us to manage societies, we need to be able to invest in protection of critical infrastructure, but finding a balance, draw a border line, that we are safe but that our businesses have resources, that they operate in a safe environment, but that they operate indeed. And Russia operates within a variety of multinational networks. Forecasting and prevention is key, putting together powerful international tools that allow us to enable improve our decision making process.
Margareta sums up, “Thank you Minister, economic models, public awareness, financial instruments, government capacity to provide safe environments, business response.” Safety should be an industrial requirement.
Gill Grady, Senior Vice President, Corporate Business Development, GSE Systems. Minister set up my discussion quite well, what private industry can be doing. If we think about disasters, things we can control, things we cannot control.
Let’s talk about Human Performance, design of plants, whether regulation we have developed is meeting its intended purpose. Introduce regulation and improve safety, what assumptions are we making. If we develop new operating procedures will they be perfect, no.
Where do humans get experience on new events, are worst case scenarios actually worst case, nuclear power industry, the methodology of probabilistic approach and likelihood of things going wrong and building our models around it.
Assumptions of Fukushima, 10 meter wall (14 meter tsunami), back up generators (affected by water), response time. Fukushima gives us an opportunity to make assumptions and new regulations. Where can technology help us, the use of technology and the importance of training operators, simulation based technology and the real risks — industrial, natural, disaster and intentional disaster. Accident assessment technologies.
Different industries handle risks differently. But we can take another step further. Not a big proponent of new regulation, incrementally changed without understanding the total affect. Russia’s capacity to take a look at the whole picture of risk based approach to analyzing the safety of their industries. Sometimes, we have more strict conditions over how someone drives a car versus a running a billion dollar chemical plant.
Question from the audience: How do you register thresholds of intentional disaster? Isn’t running down our natural capital in the name of economic growth an intentional disaster?
Valery Akimov, Head of the All-Russian Research Institute for Civil Defense and Emergency Situations of the Russian Emergencies Ministry, Doctor of Technical Sciences, Professor. Risks are growing at faster rates than GDPs, two-fold task, either to grow faster economically, or reduce risks, and reduce material casualties.
Outline several scientific problems. The ministry manages to allocate necessary funds for technology and science. Science cannot do any long term prediction of disasters, but there may be a time where we could predict, or predict with some accuracy, or theory of risk management.
Classic theories of probability has not worked out well, predicting that, for example, flooding in certain regions would not occur again, and within a few years of the prediction, flooding took place in those regions for which predictions were created. The volunteers movement is important, in the area of civil emergency response. Our cooperation with the customs, providing safety and security in regard to food production.
Reto Schnarwiler, Managing Director, Swiss Re. government and public authorities, there is a lot of knowledge available on historic events and scenarios, that we need to get a hold of and come up with a risk landscape, based on that transparency of various risks, we could come up with various consequences.
Francesc Pla Castelltort, Deputy to the Executive Secretary of the EUR-OPA Major Hazards Agreement, Council of Europe. We are in the domain of multi-stakeholders is essential, the link between the scientific work and operations, but other aspects and stakeholders much be taken on board. Risk and resilience is a full network, making decisions at the individual level. National platforms in charge of defining important planning. Creating a demand for creating resilience and safety.
Dr. Valery Sorokin, Professor, Gubkin Russian State University of Oil and Gas. Global Marine Protection Initiative. Highlights one small important area of much wider challenge of managing major catastrophes. Preventing, preparing for and dealing with accidents of offshore oil and gas developments. Global annual output is 1.4 billion tons, 1/3 total is offshore. In spite of the experience of 70 years offshore, we must say that accidents happen in offshore rigs, underwater pipelines, and there is no guarantee that it will not happen.
Offshore oil and gas production are frontier energy enterprises. Avoiding risk most of the time, but sometimes something will happen, the accident claimed 11 lives, Deep Horizon platform, flushed tons of oil into the gulf. In the aftermath of the accident, Medvedev suggested at Global Marine Protection Initiative, to deal with these activities. 2010, since then subsequent Summit had some discussions. Establish mechanisms for best practices within the framework of G20. Very top down initiative, but not what it would seem, 10s of stakeholders are participating in our exercises.
Next Panel: Mind the Long-Term Risk: New Standards to Unlock Private Sector Infrastructure Investment.
6/20- 4PM, Afternoon session: IEA (International Energy Agency) Report launching. Medium Market Report 2013.
Maria van der Hoeven, IEA executive Director. First time every IEA launching a report in a partner country. Because gas markets and Russia go together, important to see, gas remains a fuel of contradictions, stubbornly resists globalization, even in regions affected by energy poverty, gas flaring persists. Gas will emerge as a transportation fuel, natural gas vehicles, will have a bigger impact in reducing oil demand than renewables combined.
Laszlo Varro, Head, IEA Gas Coal and Power markets, about to speak. LNG exports from United States coming up. Sabine and a few other LNG terminals just coming. Persistent tightening of natural gas is a concern, consequences more widely, ongoing competitiveness of coal in Asia, with impacts on emissions.
As LNG emerges as export to Europe, creates recovery of supply and export to Europe by Russia, and increased investment in US infrastructure (gas).
China, holds large scale reserves, perhaps comparable to US, but proving difficult to recover, complex geography, water scarcity, regulatory impediments, population proximity. 2020 China will be dominated not by shale but other forms of gas (tight) and imports. Europe same story as China, but also public acceptance is also a big issue, and how important how public confidence is primary.
Spilling over of gas from United States more than development. Okay. Laszlo is up:
Global gas is still gold. However, that said, GG consumption will slow down, due to EU demand and ME/Africa supply. But. Uptick on gas soon. Round the world tour begins with US — continues to dominate non-conventional development. Better seismic, drilling and fracking, “mass manufacturing” methods in oil field services, strong financial boost from liquids. Wow. Commercial development of Gas would be greater than any outside US production.
Security issues, depletion and domestic demand growth lead to tight LNG supply. Within the next 5 years, decline in gas from ME, which has positive impact on global demand. Very large investments in Australian LNG — biggest investment base, 150 billion dollars, 85 percent taken in by Asian countries, non-spot market.
“So, if I connect high productivity in the US with tightening global supply, that would mean increased US LNG export, soon turning US into number 3 global gas exporter (contingent on Japan contracts).”
China moving to handle emissions from coal, air quality is emerging as the key question and gas is the answer. New gas heating in 3.5 million homes, 7 million tons of industrial coal consumption replaced by gas. Chinese non-conventional gas developments can not keep up with demand. China’s import needs are growing immensely.
Russia still needs to develop infrastructure in harsh climate conditions in order to fulfill request exports in China. Japan, nuclear restoration stabilizes LNG demand and eliminates need for oil. Europe, Bah, never really recovers to the pre-financial crisis level. Shale gas in Europe are not going to make the kind of shale revolution akin to US.
Natural gas automobiles. Natural Gas in transport in United States and China. In US, readily available supply, in China, mainly because of air quality concerns. US next 5 years will be about building up infrastructure to deliver gas, rolling out LNG trucks, CNG buses and trucks, deliver 120 thousand barrels a day.
Prices. $4 mbtu in US, $10mbtu in Europe; $20 mbtu in Asia.
Possible game changer — if I have to think about it: methane hydrates in Japan.
Significant gas growth in Asia. Russian Pacific and Arctic, not cheap but the good news is that Australian projects are not cheap, and off-shore Africa is not cheap. But the question is will they be as profitable as pipeline projects. No.
Political volatility. How about demand volatility, presumes global integration of gas markets. In Europe in particular, would you expect the arrival of US energy supply in the markets, that national governments would impose gas consumption as part of climate change and lower prices?
Maria — we see a shift from natural gas to coal and there could be a shift to gas as a partner fuel to renewables.
Laszlo on China. They will shift to gas, just like London did to get off of coal in the 1950s. If you want to heat a million buildings in China, it cannot be done with nuclear, but only with coal or gas. This issue will drive gas demand even at reasonably high prices.
6/20, after lunch: Overcoming Energy Sector Bottlenecks to Gain Supply Stability (in cooperation with Goldman Sachs). Geffrey Currie, Global Head of Commodities Research Goldman Sachs International.
Alexander Novak, Minister of Energy of the Russian Federation, talking about possibilities of stability of supply and infrastructure for nonconventional. Just on Monday altered the taxing law for stimulating (concessions for lower permeable horizons) unconventional oil (40 percent discounts) to ensure recovery of a few billion barrels of oil (recovery). We also agreed with Ministry of Finance, over differences of taxation, just issue additional rules and regulations, no additional commitment for separation for unconventional, sending a good signal to market for increasing recovery ratios.
Jean-Pascal Tricoir, President CEO Schneider Electric, we supply technology to oil and gas industries, we also develop technology for energy efficiencies (smart grids, smart cities) for energy consumption. Internet, connecting people to people, but the next 15 years will be about connecting machines to the internet and people to the environment [see below talk this morning which he gave the same]. Helping the automation of pipelines making them more secure and enabling faster trading. On the downstream, very often people consumer in peaks, and now developing technologies to optimize these peak periods.
J. Currie — Shale on global energy markets, far reaching on oil and gas, and coal markets. Gas is displacing the coal on US markets and we are about to overtake Russia on coal export. Why did this take place in the United States. They simply outspent the rest of the world. The largest scale. Fiscal regime, low and stable tax regimes attracted a lot more investment, but having a global impact of shale revolution. “Direct my next question to Dr. Daniel Yergin, how will shale gas develop further and bottlenecks”.
Daniel Yergin, world’s logistic system needs to adjust to two things, incredible demand and growth in production. Remember in 2008, we were saying US would run out of oil, and since then it has increased by 50 percent. In natural gas, it has gone up 26 percent over the past 6 years. How quickly will this go to the rest of the world? Given the oil and gas industry is global. First, all shales are not the same, requirements for ascertaining what is actually in the ground, and what developments of industry are available to extract the resource. Questions below and above ground, regulations versus technical capacity for recovery, misperceptions that stand in the way of development, and ownership. In the US, individuals opened up mineral rights which is a great incentive for ownership, a lot of that will depend on the fiscal regime, governments, and public, and what I see in this past year is recognition by the world of what is going on in the United States.
Currie asking Yergin again: how do you see the long-term price of oil. “Well, certainly as you say, there is a floor [price] under oil”. If you were looking at the build up of supply and low demand growth, but prices are sensitive to politics, paces of development, switching, peak demand on global basis — rather than say “price will be this or that”, need to look at the factors that will shape prices, absent political conflict,
Frontier supply. Question to Taner Yildiz, Minister of Energy and Natural Resources of the Republic of Turkey, Black Sea. What will governments need to do to attract invests, particularly in frontier. Now Taner is talking without a translator so no one in the room knows what he is saying.
Okay, now we hear what is going on. “We have very positive economic results, doubled energy consumption, second in Europe in energy consumption, positive in this sense and confidence in our future, located on the Euro-Asian portion of the continent, and looking to develop our relations with Azerbaijan, together with many projects. One focus on natural gas and oil, and what is important is pricing, political perspective, globalized. Everything is being globalized and glad that we can talk about it.
Kurdistan Ah-Rani [?] [name?] talks about new pipelines [impossible to hear him, feedback in the ear speaker, and it is too low to hear what he is saying]. Questions about legality and rate of returns ensue in Baghdad, attempting to figure it out.
Currie — US, imbalanced, with production bottlenecked, Asia, totally tight right now because of Fukushima, demanding substantial levels of LNG and finally Europe, stable but over regulated. Question to Sergei Kirienko, General Director, State Atomic Energy Corporation, ROSATOM.
Kirienko. Go Nuclear. What does it mean for shale/
Wintershall.mmdcx [?]
Yergin, what’s going to happen in the next wave of nuclear technologies. “I’ll make a prediction that by 2030s natural gas will have take over oil and coal, and that means that shale gas is much more important, second issue is electricity storage, and third thing, efficiency”.
6/20 – morning sessions: First day of the SPB Economic Forum, sitting in an early panel on G20 discussions titled, Innovation and Development as Global Priorities. 5 billion people without internet. Digital inclusion as a basic necessity such as water and electricity.
Aysegul Ildeniz, Head of Intel META, talking about gender gap in emerging markets, 25 percent less usage by women and 45 percent less in sub-Saharan Africa. Examples from Turkey, Facebook and Twitter usage, directly voicing the social change they want in the country, expressing participation that would not otherwise be necessary. Public-private (“like most people in this room”) partnerships that make the difference.
Jean-Pascal Tricoire, President, Schneider Electric, new subgroup talking about energy. Impact of IT technology on energy sector. Lack of energy takes a big toll on anyone’s life. Seven billion persons, only 2 billion have access to energy. If you focus on electricity will be multiplied by 2 in the next ten years, investing more in the next 20 years since its design since the beginning of electricity. Huge challenge also around climate change.
Cities – 2 percent of population, 80 percent of energy consumption. If we do not design a new mode of living in the cities, we will be deadlocked.
If internet over the past 20 years was connecting people to people, the next 20 years will be about connecting people to their environment (buildings, factories, cities), connecting 100 times more machines than people. Distributed energy generation. Two tremendous energy transitions. Access to energy for all. Smart cities, connected communities, job creation.
Igor Drozdov moderator, Senior Vice President, Skolkovo Foundation introduces Fulvio Conti, CEO Enel Group. F. Conti- the world is dividing into two pieces, those with energy and those without. Looking to create energy that is cheaper, reliable and sustainable. Cheap: model for energy should be market-based, the guidance for any investment. Giving access to 1.4 billion requires 1 trillion dollars over the next 10 years. You can get some of that back from government but most will come from users. Subsidies are an issue in business, keeping the price too low or high is a non-market transfer. Any kind of subsidy should be up for discussion, requiring a balanced approach, using any kind of energy available.
Whatever you use, oil, nuclear, all has to be based on cost without subsidies. New technologies bring the best possibilities for energy development. Electricity is paramount in discussion on sustainability.
You need to have systems without impact. Guidance on market basis that will guide executives on emission reduction. Decarbonizing economy, market driven, polluter pays, or incentives for new technologies.
OMZ’s Vadim Makhov, energy balance, growth of energy consumption higher than growth of population. “I fully agree that look at wastes and improve energy efficiency”. After energy efficiency is renewables.
Renewables growing sector even in compounded aggregate growth rate was 30 percent. Last year was 3 billion. We still have a question of what the bridge fuel will be.
Competition between coal and natural gas. Despite clean coal technology, some years remain to develop commercialization of reliable production. Natural gas better, best compliment to renewables, reliable, available, and less carbon footprint. Other big companies, Rosneft, announcing more natural gas fueling stations. Something needs to be done shifting over to natural gas.
Patrick Kron, CEO Alstom. Re-stressing importance of electricity. Wants to diverge on some points: (1) major challenge providing electricity to planetary inhabitants. “I don’t think one energy is bad or good, coal, gas, renewables, should be decided nation by nation basis, what is available”. (2) We need to provide massive energy but deal with global warming, curb emissions (a) improve efficiency along the power chain, address electricity 40 percent efficiency, sequestration CO2, (b) clean technologies are critical for high job drivers and long term policies.
(1) Ask the question What is a clean technology? (2) Make sure we promote green technologies all over the world (3) CO2 pricing mechanism. “We are not in the charity business so pace yourselves on the IT discussion”.
Speaker from audience. “Business has a crucial role in social planning”.
Use of Biotechnologies. Speaker [?]. Crop productivity because of industrial biotechnology. Chickens are fed with enzymes and microbes. Every chicken eaten (practically). Energy sector. Laundry is no longer washed at high temperatures, but lower temperature, because of enzymes included in detergents, and these changes will accelerate. Use of biofuels in corn, in the US, 10 percent, US farmers (next to Canada) are the largest fuel producers in the United States, in participation with biotechnologies.
Regional and national plans, de-risking, market based approaches.
Viktor Vekselberg, President, Skolkovo Foundation, Task Force Chairman, with the last word, stating a number positive suggestions, hoping the task force will continue to cooperate and work together, including market motivating comments, “We should not support any form of protectionism, local support of promoting national economies will go nowhere”.
NEXT Panel: Delivering Growth Capital To Russia’s Entrepreneurs . It is absolutely freezing inside this Conference hall. There are a lot of panels going on, but I want to sit this out and wait for this upcoming panel on Entrepreneurship in Russia. About 15 minutes wait and already, there are several cameras in the room, and the seats are filling up. Folks are really photo-op crazy here at the SPB economic forum, a veritable photo frenzy…
Here we go.
Simon Nixon, Chief European Commentator, Wall Street Journal. Introducing Pekka Viljakainen, Chairman, All Capital. Speaking about his work, advisor at Skolkovo, raising capital for infrastructure projects. Giving a lecture about “smart money”. Biggest barrier for smaller companies — not corruption, regulation, politics, governmental issues — but lack of trust. When you speak to entrepreneurs in smaller cities, the question is “why do I need your money, are your going to take my company” — Russia is about personal friends, without trust, no investment should be made here. Every single investor, everyone knows, the weak point, is the minority investor, “short version, is if you have less than 50 percent, you will be screwed”.
“If I want to triple my money within 5-10 years, Russia’s SME and Internet market is extremely attractive.”
Turning now to Sir Suma Chakrabarti, President, Bank for Reconstruction and Development. Biggest killer for new entrepreneurs is concentration of economic power in three sectors: (1) energy industry; (2) geography (within certain locations); (3) State still owns too much.
Needs repeating, with concentration of power, you have vested interests. Red tape and bureaucratic hurdles are a big problem. In our marketing of Russia to foreign investors, old investors, easy to do — quite easy to do repeat business. But new investors, very difficult. The more Russia is interlinked with global economy, the more entrepreneurship will be standardized, for example, especially in management skills area. “Foreign investors don’t like the top down approach”. SME’s (small and medium enterprises) are doing well.
Now up is Sergei Borisov, VP for Small Business Development, Sberbank. We have a lot of problems on SME. We have 6000 entrepreneurs every year, and looking for solutions, and I would agree with the lack of trust issue, but we also have a lack of knowledge and skills. Business plans are not fulfilled, payments fall behind, delivering access to capital and lack of loans. 30 percent were saying they were lacking loans, getting better, 22 percent these days. Interest rate is 19.5 percent. Thinking about how to decrease this rate.
Now up, Mark Haefele, Global Head of Investment, Chief Investment Office of Wealth Management UBS. Going to give a background on where UBS is, and then what he does, his view on SME lending globally. Been in Russia since 1997 as global wealth manager, bring billions of dollars to Russia and provide lending in the national structure.
Russia has done a lot to bring attention to this SME issue (including this panel) — and SME is difficult globally. UK is ranked no. 1 by World Bank for SME, but still, low by comparison with what money is available. Germany to Spain there is 2 percent difference. So SME is a problem that extends well beyond Russia.
Andre Sharonov, Deputy Mayor for Economic Policy Moscow. The task of decentralizations should be done by market not by government. We have typically attempted to involve everyone but that does not work well, and the government should be not replacing independent institutions and the market mechanisms. However, I would agree with the banks’ problems with spreading money around the SMEs. Very often, the entrepreneurs themselves and the government that follows suit, say that all problems fall down to lack of capital. But in fact, a non-competent experience or actions, very often, entrepreneurs mostly need the mentorship and knowledge.
Specific tools used by Moscow used to stimulate SMEs — (1) Subsidies, when there are special people or market instruments, we are a compliment, but that we should lose our money only in the last instance. Everywhere where governmental money is spent, it should be married with private money. Track records of Moscow investment fund, takes certain risks if a company goes on default. And our task is to deliver the leverage; Micro financing support. Also, measures that reduce the need for financing. We cannot cover all SMEs and we find that innovative entrepreneurs. Finally, we continue to support business innovations.
Pekka with final note on SME. Do not look for money from the bank. Will not happen. Get the money from private investors. The business angels. Make that money fly faster. The Banks will not help.
Why is the interest so high? Is is structural?
Pekka speaking again on another topic, the success of building new economics is how much private money is channelled to private companies. How easy or difficult to start a business. We did it through Skolkovo services within 42 days. We have a company, book keeping, bank account. More than in Finland or Australia, but it is not that bad. The answer for money is regional.
Chakrabarti: Business environment survey in Russia, website, which can tell you where to start a business. Second, things are getting easier. Mark H., you don’t have to listen to Mr. Bulldozer (P. Viljakainen) for very long to realize how to go about things. The best thing I can say about attracting capital is speak to the issues of investors concern.
Sergei Borisov, The main problem is the Dutch Disease, where the oil and gas contracts and cash are inflating things.
6/15: A brief behind-the-scenes look at the “personal web office”.
Much of the information and access codes to move through the site is event-confidential. I have altered the screen shots by darkening out sensitive data. I want to provide availability to the aesthetics of SPIEF participation back-stage. The SPIEF website itself provides ample information about participants, programs — just about everything to imagine about the goings, with the exception of personal attendance.
There are a number of advance practices for obtaining an invitation. I will focus briefly on what takes place after having obtained via email an invitation.
Here are two images that give you a sense of how to manage one’s identity on the SPIEF website.
The first includes the personal codes (blackened out) for entering your personal web page
The second image, the data page,requires uploading your personal image.
There is a badge presented at various accreditation booths in the city, usually at high-end hotels.
The accreditation process takes about 10 minutes. The SPIEF allows accreditation to take place directly upon arrival at the airport.
Here are some photographs from previous years that I attended, at the airport.
There are quite a few billboards at the airport that advertise the SPIEF event.
Throughout the city, a tourist would see numerous billboard advertisements concerning the SPIEF.
English is ubiquitous in relation to the SPIEF. The emphasis on English language at the SPIEF gives the impression of not having left London or one of the Nordic cities, where English is fluently spoken.
Posted in Paparazzi Ethnography, tagged Arkhangelsk on June 9, 2013| Leave a Comment »
PETROMAKS Workshop, Sponsored by the Research Council Norway.
Program
Vladimir Pavlenko, Arkhangelsk Science Center, Ural Branch of Russian Academy of Sciences, opens the program, and I quote him directly: “[We have in attendance] Norwegian representatives from Moscow. That tells us that this is an important and crucial conference, since they are here. This is the 7th conference, the tradition is such that agenda, we take up the most important questions of arctic oil and gas development, questions concerning environment, and how people will work in the environment, traditional agenda. Have been doing this for many years, Siri open the conference from the Norwegian side” (speaks in Russian with translator).
Siri Helle Friedemann, Department of Petroleum, The Research Council of Norway: “Dear governor [etc], Norwegian and Russian cooperation – white paper two years ago, revised strategy for High North the same year, requiring new knowledge in a number of areas, value creation, international research cooperation” (speaking in English). Joint cooperation in Norwegian-Russian. 2005 Moscow, first meeting.
Meeting tomorrow networking event. Enrolled for site seeing and networking.
Pavlenko introduces Governor of the region, as presented by [name]
Speaks: “On behalf of the governor, allow me to introduce the conference, practical and scientific questions concerning the Arctic, take care of the people working there, and environment, northwestern part of the Arctic, Pechora and Barents gas province, working out at sea, Pechora sea, we have found 6 fields, quite large oil and gas fields, territory of continental shelf, and need to find more fields as well. We are also working with geological studies, rosneft, drilling on Prirazlomnaya. Working with companies and industry, fruitful and get something new and interesting from the conference” [no applause yet].
Siri introduces the next presenter: Sverre Rustad. Speaking in Russian (!): “The fact that both Norway and Russia have created positions at respected embassies suggest our commitment to [cooperation] . Every 4 years, once every parliamentary term, white paper – white paper 2013 (March). Government announced, in the future, there will be 10-year plans for staking out directions for knowledge, education, priorities in white papers. [Plan] will guide investment, white paper every four years to update the plan. Annual budget defining goals what can be done, but the plan will set clear targets, such as r & d levels, research priorities are the same—industry relevant research in key areas, meeting global challenges, larger theme of energy supply, global warming, environmental protection, the important – internationalization of science, important platform is participation in the EU programs, another program is Nordic countries, and then strategic cooperation with some country partners (including Russia)…
Cooperation allows us to do things at the national level for a small country like Norway. Ninety-nine percent of research takes place elsewhere, and we need access to that, global problems require global solutions, getting to know others better, centering on Russia’s position as a neighboring country in the High North, this is important part of this internationalization. In connection with the new white paper, new conversation what takes place national and international level. Not a priority in the previous framework….
High North strategy is one the of main pillars of Norwegian international policy. Energy environmental protection, cooperation with Russia takes many forms, initiative comes from research itself, dedicated programmes in RCN – as exemplified by this conference today, 7th framework program of the EU Russia is very important. 1500 Russian students in Norway – less than 100 Norwegian students in Russia – we want to see more Norwegian students in Russia. Norwegian University Centre in St. Petersburg.
Wishing you good luck, and although I am not an expert, I look forward to your discussions”.
Up next, William Christensen, Foreign assignments in the US and Brussels. Speaks in English. Dark blue part of the future is prime production, falling off, so we need to add on more production, the light blue represents resources from unopened areas. “Open areas and unopened areas” are the areas of the North. Opening up a new area in Barents, opening up for exploration and production this week. In the disputed area, Barents Sea SE and the areas around Jan Mayan, very important achievement, this area will be 300 million oil equivalent. Statoil cooperating with Rostneft in the upper areas of Barents, quite few challenges, offshore.
Jan Mayen shares with Iceland, reviewing resource potential in Jan Mayen. Outside Lofoten, always a discussion headed debate. All the licenses been issued in the 22nd licensing round, Rosneft cooperation with Statoil, first time Russians on the Norwegian shelf, a good thing. A lot of possibilities and Russian cooperation very important.
Highlighting petroleum research, Petromaks 2 covers research until [date]. Demo 2000 conveys demonstration. Government active in the whole chain, what we need in the north, off shore Norway. Research centers for petroleum activities, arctic technology in Tromsø.
Tarjei Malme – been out to US Chad and other places. Coordinator of Petromaks 2 funding opportunities. Introduction to new 10 year program petromaks 2. Relevant for researchers here today. Strategic research for innovation, not down stream activities, covering quite broadly upstream, universities, research institutes, industrial sector, 220 million kroner. Objective of Petromaks 2: knowledge creation and industrial development to promote development and optimal management of Norwegian petroleum resources within an environmentally sustainable framework. Thematic priorities in PETROMAKS 2 – every technology has challenges and priorities to meet these challenges.
Emphasize collaboration and networking among universities research institutes and industrial sector—competence, recruitment, research based education. 320 million kroner available for calls this year. Norwegian institutions must apply, but in collaboration with Russians. Joint call between RCN and Russian FBR – RFBR… Sponsoring program polarprog –
Text will be published in both countries – September 4 for research institutions [CHECK THIS OUT this week!] [applause].
Plenary presentations. Pavlenko: Eight oblasts in Russia in the north, and this is characteristic – good thing that many people are available, we are in total agreement with internationalization of science in the Arctic, this conference is a very good example, shows we want to internationalize things in the two countries, I have talked about this many times, internationalization of science many times, interested in activity, going on in the arctic, result of this conference will be very important, giving a sense of what we are doing here together.
Harald Brekke: mapping the outer parts of the continental shelf, for submission for Norway to United Nations about outer continental shelf. General overview of geology of Barents Sea. Plate. Moscovian set up for the arctic sea. Tectonic photo.
Leopold Lobkovskiy: taking part in many expeditions, not just sitting in his office, has written on methods of monitoring and developing continental shelf in the Arctic – a group of scientists a system to prove the continental shelf in Russia – Abnormal events – methane coming out of the shelf on the eastern part.
Lionel Camus: Real time monitoring of eco system. Environmental issues; research needs for local knowledge; knowledge gaps, Admusen Center. Ten points of oil drilling challenges in Arctic—Goliat oil field operated by ENI – last week in Shanghai, Chinese wanting to use the NE shipping route for goods, and tourism – 65000 tourists visited 2010 in Svalbard. Risks exists and increasing, border area between Norway and Russia. Two different legislation towards policy harmonization, Barents sea: maritime ecosystem managed by two countries.
Western side – risk based approach.
Easter side – polluter pay principle
Barents sea- Arctic animals not more sensitive to pollution temperate. Barents Sea, a a unique ecosystem with strong regional differences. Different from the North Sea, need to adapt create responses unique to Barents. High abundance of sponges and coral in the south west. Impact assessment of drilling mud on sponges/coral. –
Creating an ecosystem model. Integrated modeling framework, computer simulations on maritime activities, all for sustainability. – run them in a supercomputer in Tromsø. Marginal Ice Zone – ice that is coming and going in the Barents sea – see image.
No sensors for dealing with indicating oil spills under the ice. In situ burning, mechanical recovery, chemical dispersants/herders. OGP Joint Industry Project
Gaps of knowledge –
Increasing ship traffic—risk for impact of bunker oil
Toxicity studies at the community/ecosystem – level for ecosystem models
Brackish water/Shallow water
Further developing real time online monitoring technology.
Roald Amundsen Petroleum Research Center. Consortium for Arctic Petroleum Activities
Vladimir Masloboev – technogenic affects on the Arctic. Co-chairs and colleagues, thank you for the invitation. Talking about removal of spilled petroleum from various surfaces, water, solid, etc. When it comes to fighting oil spill on land, using bacteria, mushrooms, absorbents – plants absorb oil. Microorganisms on the oil surface, Rhodococcus destroys the oil droplet, properties of the microorganisms destructing petroleum hydrocarbons. Transforming pollutants into nontoxic compliance, ability to inhabit plant’s root system; increase the nutrient status of plants, aboriginal plants. Experimenting, 5 years now, on establishing plots with gas condensate and oil oxidizing bacteria in forest soils. Remediating soils during one vegetation period (90-100) days. Rolled grass plots. Roll out grass on oil. Technogenic barren before planting – Bitumen emulsion against dusting. VIPON – Shows a Pasteur in Paris as last shot – with photo of fellow colleague.
Valeri Kaminskiy, Director all Russian Scientific Research Institute for Geology and Mineral Resources of the Ocean: They opened the Shtokman field and other fields. Giving the history of the seismic development in the eastern continental shelf. 1995 – concept for the study of the continental shelf, and for licensing rounds. Licensing in the Eastern Arctic. Rosneft and Gazprom are the only companies who can obtain licensing. Shtokman — the project has stopped. Quite a lot of means to develop. Gazprom working these days more oriented towards Yamal. Statoil dumped on Shtokman. So, I decided to go to the Issues of Nature Protection and healthcare of personnel and population in connection to Development of hydrocarbon resources on the arctic shelf.
Serge Cukierman: Chemical dispersant application in the Barents Sea. Total suggesting a petromaks project on dispersant use in the Barents sea. How it could happen and legislation could move forward.
Vtsybin – Nenets – no translator—someone stepped in to provide ad hoc translation. Companies who come to the shelf are not ready for oil spills. They do not have proven oil spill technologies in ice conditions.
Forecasting in the Barents Sea.
Lars Hole: Weather, waves, currents, and oil spills. Meteorologisk institutt. Outline: Weather forecasting. Oil Drit service at MET Norway. Forecasting atmosphere 6 times a day updating. Polar low. Cold air outbreak over warm stater. Tracking system for polar lows.
Barents Watch portal [GOOGLE THIS]
Are Sydnes, Bambulyak, Camus. Coastal Environment, Technologies and innovation in the Arctic. ENPI Kolarctic programme (EU) 2011-2014. Contribute with knowledge innovation and expertise in addressing challenges posed by offshore developments in the sensitive marine environment of the Arctic
Lars Henrik Larsen— scenario of shipping disaster. Shipping in the arctic. See slides. Great talk.
Lukin A: Kova river, oil spills, repeat spills affects on 18 species of fish. 3 zones, breeding zones, lake river systems, tributaries systems, Kova river mainstream, spawning area, with each zone having different fish. Population crash of certain species, while other species become more populated and distribution completely changes.
Ivar Singsaas. SINTEF. Oil spill response analysis in arctic waters.
Summing up
Salve Dahle: Environmental session – twelve papers, occupational health, ecological risks associated with oil activities and shipping, those who have questions I hope you can bring them up to the speaker later.
Personal comments: international presentation, joint Norwegian Russian French expertise, pointed to need to think about dispersals for successful oil development in the arctic and need for regulatory framework.
Then Nenets, very often, oil companies are not mentally prepared to deal with oil spill, onshore capacity needs to be developed before going further, from methodological – polar lows are difficult to handle, a lot of observations in order to be prepared for polar low. A polar Arctic, Norway, Russia, Sweden, innovation technologies for oil spill in the arctic, coastal environmental protection, capacity building, — another using bivalves for environmental modeling, main point that environment itself causes a lot of stress for the animals, and natural variation itself causes stress to animals, just think how much oil spill would create. Shipping and transport of containers is important, and there is no preparation at all for handling such an accident, and with more shipping in the North Sea route, this would be also a likely situation. Oil accidents and Shipping accidents require attention. Fish species testing that have been exposed to oil, and the speaker pointed to pronounced change over time, is this irreversible or will it go back to the way it was, finally Sintef and oil spill response and recovery, looking at the type of oil, and its fate. Best strategy for dealing with oil spill. Then, socio economic, environmental sensing, a combination of strategies for monitoring environment and human activity, pointing to one system in Norway and one in Russia.
Vladimir Masloboev responds to Salve Dahle. How to avoid oil spills instead of how to deal with them once they happen. Not only 50 percent of those living in the Arctic are dependent upon how people are living, not just weather, how people coming to the Arctic and how they are living. We should have that for next meeting, and have more time to ask questions, not one question was asked.
Siri now talking about noting the need to have talks about people living in the arctic, and noted that we would like longer panel sessions.
Moving on to Panel number 2, chaired by Morten Smelror, Leopold Lobkovskiy. Morten talking now, about geology of arctic sea, concentrated Barents, the deep, the middle and upper part. Deep structure of the crust, shaping tectonics, and determining the way you model the heat flow (thermic field) – basic structure of Barents sea, and going back to plate tectonics, involving important origins of Timan, etc. ways different plates involved, assembled, to become the crust depends on the origins. We had sort of a coalition – Norwegian and Russian work on this issue, agree on their models, but need to have more work done, and identify where crusts actually are. Next talk sedimentary model, … lastly, what happened in the late, since middle miocene, namely the glacial history, very important for Barents sea, because it modified the top – at the mouth of the ice sheet—stability of slopes, sedimentary models, broader application. Ongoing work was also present, ice flows and movements. Ice is a very affective … some of these features are linked to gas leakage so further work to expand the understandings of pressure situations in the subsurface. And migration of hydrocarbons shifting the mass of the situation. Petroleum systems how they move and react. Six presentations all together, covering issues. Also found that we are on the same page on many issues, but need further studies and work together.
Panel Three – Kimberly Mayes, Valeriy Kaminskiy: “Very exciting day today, in session three we have heard nine presentations, impacts of sea ice on the offshore field. Drifting of ice berg, can change direction very fast within minutes. Mapping ice bergs, engineering of oil transfer of eastward of Barents sea. Protection of wind erosion and storms, using vegetation protecting the soil of melting of permafrost. Pechora sea, knowledge of soil behavior for construction of offshore structures. Combination of oil terminals and transport pipelines, exciting ways and possibilities for this. Use of traces of drilling mud. Main functions of drilling mud, field test show that samples give good results for ionic composition of water, environmental friendly way of doing it”.
A signing ceremony between Akvaplan Niva and Komi Center.
Pavlenko – “[A] thank you to everyone who takes part in the conference today, [I want to] thank Norwegian colleagues for taking the time to come here, our northern friends for hosting here at Arkhangelsk- representation from many parts of Russia [are] here, leading institutes representing oil and gas, representatives from eight oblasts of Russia, all parts of the Russia, ecological organizations involved, important for the development of our cooperation, the main aim of the cooperation, to come together and find common solutions. I would also like to say, for the first time, we also were able to conclude that we should publish the results of our work. We in Arkhangelsk will do that, and we ask you to send your materials to us in the next couple weeks, and we will publish it”.
“A few words about [the] Arkhangelsk center, doing quite a lot to prepare for the conference today. Actually, there is another big meeting taking place tomorrow, so I thank my colleagues for doing so much in preparation. I think we can say that the conference was a success, also we are going to use the experience in our work, and we will also invite you to other meetings in Arkhangelsk and other parts in Russia. For certain reasons we did not get [the] possibility to have our last session at Severinsk tomorrow, Severinks – geological institute, and we could have used it to look into ecology. I’m very sad [that] we were not able to go there, but maybe possibilities [for] next time. We changed the program for tomorrow, for our Norwegian colleagues [we] have a special meeting, without [wearing a] tie — beer brewery, we think we leave Arkhangelsk – in the morning come to the Arkhangelsk to the [?] center.
Presentations on different technologies for oil and gas, Director institute Vladimir Nikitn will come to do this, and this starts at 11AM, you will hear about our center, then we we will go to the boborova – without a tie, last part of our meeting.
First meeting – leaving 10 AM from Hotel go to presentations, discuss perspectives.
Then, those of you going to Chamber of commerce, OR, others go to Brewery.
6/14: Just heading now to Arkhangelsk for a personal look at participation in the second event of the Norwegian-Russia Arctic Offshore workshops sponsored by the Research Council of Norway (RCN).
It was my good fortune to attend the previous event, now three years ago, in summer 2010. At that time, Paparazzi Ethnography, was just getting up and running and we did not provided any on-time accounting of the first event, though we have plenty of notes. Here, I hope to provide data on many of the talks as well as give a sense of the aesthetics of the event.
See you in Arkhangelsk!
Posted in Paparazzi Ethnography, tagged Helsinki on June 4, 2013| Leave a Comment »
Lecture 6 June 2013, U Helsinki.
6/2: Eeva Korteniemi, Planning Officer, was kind enough to show me around the Aleksanteri Institute, Finnish Centre for Russian and Eastern European Studies, independent institute of University of Helsinki, Finland for academic research. With training programmes and custom-made projects, the institute’s website details the offerings for researchers accessible here.
Fall 2010, I presented the annual Aleksanteri Conference, Fueling the Future, focusing on Russian energy politics. Since then I developed an interest in working with Aleksanteri on examining Western Expertise in constructing Russian energy futures.
Aleksanteri’s 2010 conference attracted academics and policy analysts from Russia, Western Europe, the United States, and marked an early experience for StudioPolar‘s Paparazzi–Ethnographic blogging about the fleeting phenomena of events (links, Day 3, Day 2, Day 1).
In preparation for my lecture, Aleksanteri provided accommodation at Tööloö Towers, 20 minute walk from the Institute. Just inside the main entrance of the Institute is a table with Aleksanteri newsletter, copies of books published by Aleksanteri’s Kikimora press and pamphlets relating the goings on in the coming weeks.
The materials provide evidence of scholarly events (upcoming lectures, visitors, exhibits), publications, and visiting researchers. A short informative brochure for visiting scholars details the Institute’s activities on networking within Finland on active cooperation with the international research community with a strong outreach agenda and a full events calendar.
I picked up two books published through Kikimora press as casual reading, titled Business Entry in Eastern Europe, edited by Jan-åke Törnroos and Jarmo Nieminen, and Russian Greens in a Risk Society by Oleg Yanitsky, both weighing in at 300 pages each.
Yanitsky’s argument is illuminating, suggesting that reflexive modernization in Western Europe had existed already for decades in the USSR/Russia.
Eeva’s engaging tour kept me on my toes!
I had the opportunity to attend their area studies discussion which took place on the first floor, in a cellar like room, with arched stone ceilings. The entire setting was mundane and yet seemed to be taken directly out of a cold war spy novel.
Imagine: academics meeting in a cellar of an Areas Studies institute in Helsinki to discuss methods on reformulating analysis of the east.
In the cellar, there was lively discussion about the topic, including use of the words imagination, geographical boundary lines, economic and institutions, memories of generations, real/consistent/pragmatic study, the reality of state socialism in the region – the “positive legacy” – high investment in human capital, great transformation from sovietism to capitalism and my favorite, “area studies is an applied science”.
My immediate feeling was agreement, but then I remembered that all science is applied, in the sense that science (more than peace itself), is simply politics by other means, a war machine.
We were also treated to the Finnish perspective to area studies, the politics of science and how it changes over time, and how institutes change or have a direct impact on research. One of the discussants mentioned three main developments/phases since the 1990s, within Finnish research. First, the economic collapse of the Soviet Union led to lack of market for Finnish goods, and realization of lack of knowledge about Russia and its influence on Finnish domestic politics. What had been Russian-Eastern European studies in the Finnish perspective was mainly about former Soviet Union. So the goal of first academic programs in the 1990s, within Finland, was to generate new scholarship.
A second phase, the mid-1990s, saw Finland joining the European Union (EU), and re-inventing a role for itself as the Russian expert in the EU and for mediating, having a new role, in the form of possessing wide spread knowledge about Russia and even disseminating the idea that Finns know about Russia, that they were the holy grail of Russia. A new attitude toward institutionalization of Russian studies, coordinating scholarship and education on Russian studies and eastern Europe.
Finally, a third turn, European crisis, and industry restructuring.
In the contemporary scholarly discourse, according to our discussion, there are three main agendas: 1-what perspective to take on Russia; 2- what it is worth; 3-how to do it.
Here, the discussion became more arcane, with references to Finnlandization, a heated debate concerning scholarship accusations of being left wing, and turning against the transition of Russia with a critical tone, but then, in 2010, a post-Finlandization, where accusations turn upside down, with too mild a critique against Putin’s Russian. Moreover, Europe as a normative power approach, had an important impact on how Finnish scholarship should be interpreted, including the transfer of “our” ideas (human rights) to Russia, seen everywhere through the EU value systems.
A second agenda of contemporary debates revisits the Area Studies concepts themselves, with new words emerging, such as Eurasia (traveling concepts) – East is not only Russia, but more about Caucasian countries, Central Asia, China, an interconnectedness of things and geographies. The East is not just Russia anymore. Also, the North, that there is a Nordic dimension initiative, and how Russia is interconnected with the Northern region and Europe, and Arctic perspective. Reconceptualize Eastern Europe as such – euphemisms, east central, Balkan, Baltic, trying to avoid and maintain discussion – European studies that claims post socialist countries.
Posted in Paparazzi Ethnography, tagged Tromsø on June 3, 2013| Leave a Comment »
Paparazzi Ethnography 
