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Argus Russian Crude Market 2017
Global energy price reporting agency Argus held its Argus Russian Crude Market 2017 conference on 8 June in Moscow. The event, which was supported this year by SBERBANK CIB, provides an annual forum for discussion of the most important issues facing the oil industry.
This year’s conference was attended by over 90 delegates from 55 companies representing Russia, Belarus and Austria, among others. The participants included key players in the Russian crude market, such as exporters, trading firms and finance companies, as well as major European and Asian consumers of Russian crude.
The head of Argus’ Russia and FSU operations, Vyacheslav Mischenko, opened the conference with a welcome address. He noted the success of the event in providing a communication platform for Russian crude market participants and expressed special thanks to this year’s general partner, SBERBANK CIB, for “putting forward new important issues to be discussed at the conference”.
SBERBANK CIB’s business manager for commodity trading, Thanos Dimou, said the company was looking forward to promoting the development of the Russian crude market in partnership with Argus.
At the first conference session, the deputy head of the Russian energy ministry’s oil and gas production and transportation department, Andrey Tereshok, reported on the current situation in the Russian crude market. This included an overview of the measures taken to encourage advanced crude refining and the results that this policy has achieved. He also pointed out that Russian oil companies should continue to upgrade their refining operations.
The head of the fuel and energy industry regulation department at Russia’s anti-monopoly authority FAS, Dmitry Makhonin, spoke on the progress of the project of roadmap development and provided an update on the agency’s plans to create a price benchmark for Russian crude exports.
The delegates showed particular interest in the presentation by Argus vice-president for Crude, Middle East and Asia-Pacific, Alejandro Barbajosa, who described the key development trends in the global oil industry.
The second session was led by SBERBANK CIB, during which the conference delegates were brought up to date on ways of managing price risk in the upstream and downstream sectors, the use of advance payments for shipments of crude and oil products as an alternative to standard lending, and about the opportunities that have opened up for the bank in the Russian market after it registered a new company, Commodity Trading LLC.
At the session dedicated to the Russian crude market, delegates discussed important issues related to future developments and new export destinations for Russian crude. The deputy head of the energy department of the institute for energy and finance, Alexey Belogoryev, presented a forecast of oil industry development until 2035.
Argus editor of Crude Exports Report Anna Solodovnikova assessed the demand prospects for key Russian export crude Urals in European and Asian markets. The data presented by Solodovnikova showed that Urals is holding its position in its traditional markets of central, west and east Europe while gaining market share in other regions.
Gennady Timonichev, a senior lawyer at the Russian tax and customs practice representing DENTONS, gave an account of transfer pricing in the oil industry, current practice and the prospects for both judicial and amicable dispute resolution. He believes that it is imperative for traders to use reputable price assessments, such as those provided by Argus, in the current environment.
During the final session, the head of the Moscow oil and gas sector at consultancy EY (CIS), Denis Borisov, presented an analysis of industry-specific taxation systems in Russia and worldwide. Borisov highlighted the switch to the excess profits tax and the effect of the fall in crude prices. “The Russian way is peculiar owing to rouble devaluation and the Russian taxation system as a whole,” he said. Borisov also stressed that a rise in crude prices prompts increased financing, which should be invested in industry development.
The final report was given by Margarita Kozenyasheva, an adviser to the chief executive of industry association AssoNeft, which represents small oil producers. She described the current status of small independent oil companies, their importance and development in the Russian domestic crude market.
The day closed with an evening cocktail reception, which provided an excellent opportunity for conference participants to discuss important industry issues in an informal atmosphere while enjoying fair summer weather and beautiful views across the centre of Moscow.