IRVING, Texas – Growth in Russian oil and gas production is of vital importance in meeting future world energy demand, said Rex Tillerson, senior vice president of Exxon Mobil Corporation (NYSE:XOM), speaking today before the US-Russia Commercial Energy Summit in Houston, Texas.
Tillerson pointed out that the global demand for oil and gas is projected to grow annually between two and three percent over the coming decade, and declining production in current fields increases the challenge of meeting future demand. He stated that an amount equivalent to two-thirds of the world’s current production levels, or some 80 million oil-equivalent barrels per day, will need to be added through new projects at a cost that could reach US$ 1 trillion.
Tillerson focused on the importance of Russia’s role in supplying this new energy, showing forecasts indicating the potential to nearly double current production levels. He noted that no other non-OPEC country “has the potential that Russia possesses” to grow oil and gas production levels to meet this demand challenge.
While emphasizing the tremendous potential in Russia, Tillerson discussed those factors where continued improvement will make Russian investment opportunities more competitive with other worldwide projects. Using ExxonMobil’s US$ 12 billion Sakhalin I Project as an example, he indicated that the keys to commercializing Russia’s huge resources are advanced technology applications; progress in the development of effective legal, regulatory, and fiscal frameworks; and continuous dialogue and co-operation between industry, governments, and citizens.
Tillerson noted the potential value of strategic partnerships where “the extensive capital resources, technological capabilities, and project management capabilities of US companies can augment those of experienced Russian companies.”
In discussing the far-reaching benefits of such massive foreign investment in Russia, Tillerson cited that the Sakhalin I Project “will bring significant economic benefits to Russia, including billions of dollars in revenues and thousands of employment opportunities. Over US$ 1 billion of contracts have already been awarded that include Russian content.”
The text of Tillerson’s speech may be found on the ExxonMobil website at www.exxonmobil.com.
