Despite the low oil price environment, Russia's upstream improvised, adapted and ultimately overcame a challenging 2016. Companies increased drilling and brought several major greenfields onstream to help Russia reach a post-Soviet liquids production peak of 11.2 million b/d. The budget deficit put pressure on the Russian government, however the privatisation of US$16.4 billion worth of upstream assets helped plug a financial gap. Rosneft strengthened its commercial relationship with China and India through US$7 billion worth of M&A deals. Meanwhile IOCs demonstrated their commitment to Russia through frontier exploration JVs. From a gas perspective, Russia is on schedule to deliver its first Arctic LNG project after Yamal LNG completed financing. However, it was a mixed year for Gazprom’s pipeline projects, which are faced with different degrees of political uncertainty.