Russian Federation upstream: 5 things to look for in 2018

From cuts to growth - Russia lays the foundations to unlock value and access new markets in 2018. We analyse five things to look for: Stable liquids production of around 11 million b/d as Russia adheres to the OPEC+ production cut extension. An early exit is possible if Russian operators opt to increase production as the oil price rises, but we expect the deal to be honoured until end-2018. Frontier E&A will become more commercially attractive as the oil price strengthens. A handful of offshore wells to be drilled despite EU/US sanctions. Eni and Rosneft will progress their Black Sea project, while Gazprom and Gazpromneft will explore offshore Sakhalin island. On the M&A front, CEFC China could partner with Rosneft in four upstream projects to cement energy ties between Russia and China. In the gas space, Russia will become the 9th largest LNG supplier globally and Gazprom’s investment will peak at US$17 billion as it advances its gas infrastructure megaprojects.