|The White House
President George W. Bush
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For Immediate Release
Office of the Press Secretary
May 24, 2002
Fact Sheet: Energy Relations
United States-Russia Commercial Energy Relations
Energy (mostly oil and natural gas) accounts for 40 percent of Russia's exports and 13 percent of its GDP. After Saudi Arabia, Russia is the second-largest producer and exporter of oil in the world. In 2001, Russia produced about 7 million barrels of oil per day, and exported about 5 million barrels per day.
Total foreign direct investment in Russia's oil and gas sector to date is $4 billion. Currently, there are seven U.S.-partnered joint ventures producing oil in Russia, with the largest producing about 50,000 barrels of oil per day. Looking ahead, major new foreign investment will be needed for Russia to maintain or increase oil production levels.
Russia's existing pipeline system limits the growth of Russia's oil and gas exports. There are plans to build new pipelines and to increase the capacity of existing ones, including the Baltic Pipeline System, a pipeline from Siberia to China, and a pipeline from Sakhalin to Japan. There are also Russian companies looking into the possibility of exporting oil through the Baku-Tblisi-Ceyhan pipeline.
Sakhalin I and the Caspian Pipeline Consortium's Tengiz-Novorossiisk pipeline are premiere examples of U.S.-Russia joint investment projects.
The Sakhalin I project operates under a Production Sharing Agreement (PSA), and includes an American partner (ExxonMobil). The consortium is performing exploration activities and expects to start exporting gas in 2005. The legislative framework for Production Sharing Agreements has not yet been completed. Four other major projects under consideration by American companies are awaiting this PSA framework before moving forward.
The Caspian Pipeline Consortium's Tengiz-Novorossiisk oil pipeline is the largest, single foreign investment in Russia, and has a capacity of over 500,000 barrels of oil per day. The U.S. partners include ChevronTexaco and ExxonMobil.
Russia is the fifth-largest export market for U.S.-made oil and gas field equipment. Last year, American companies exported $282 million of oil and gas field equipment to Russia.
To promote opportunities for greater commercial energy cooperation, the United States Secretaries of Commerce and Energy are planning to host a U.S.-Russia Commercial Energy Summit with the Russian Ministry of Economic Development and Trade and Ministry of Energy later this year in Houston, Texas.
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