Fact Sheet: Russian-American Energy Cooperation

The energy sector is one of the most promising areas of bilateral economic cooperation between Russian and the United States. It has the potential to become a key element of Russian-US strategic partnership and one of the significant factors ensuring strategic stability in the world.

A high degree of compatibility and complementarity of energy strategies adopted recently by Russia and the United States, tangible shifts in American geopolitical approaches in the context of 9/11 as well as a certain degree of independence of Russia's oil policy (including that from OPEC) all provide for greater opportunities in this new area of bilateral cooperation.

The Russian-US energy cooperation is progressing on two tracks and involves business-to-business and government-to-government cooperation. The impulse to cooperation between Russian and US energy businesses was given at the May summit in Moscow through a bilateral energy dialogue launched by Vladimir V.Putin and George W.Bush. The statement made by the Presidents at the summit reaffirmed the commitment of both sides to:

-                     develop bilateral cooperation on a mutually beneficial basis in accordance with respective national energy strategies,

-                     reduce volatility and enhance predictability of global energy markets,

-                     facilitate commercial cooperation in the energy sector enhancing interaction between the two countries in exploration, production, refining, transportation and marketing of energy, as well as in implementation of joint projects including those in third countries,

-                     encourage investment aimed at the further development and modernization of the fuel and energy sector of Russia, including expansion of oil and gas production in Eastern Siberia, the Far East, and offshore areas,

-                     promote access to world markets for Russian energy, including through the commercial development and modernization of Russia's port and transportation infrastructures, the electric power and gas sectors, and oil refining capabilities,

-                     foster science, technological, and business cooperation in the use of unconventional energy sources, and energy-efficient and environmentally clean technologies,

-                     cooperate in elaboration and development of new ecologically safer nuclear power technologies.

The second track of energy cooperation is the inter-governmental Energy Working Group, which is based on interaction between Russian and US government agencies. The Working Group held its first meeting in Washington, D.C. in April 2002 and featured constructive exchange of views on the world oil market prospects, energy investment, reform of the energy sectors, energy efficiency and environmental policies. Russia and the United States identified some areas of energy policy interaction and affirmed their interest in strengthening the energy dialogue between Russia and the United States in:

-                     development and implementation of national energy strategies,

-                     legislative support for the energy sector,

-                     investment policy in the energy sector,

-                     reform of the electric power sector,

-                     enhancement of energy efficiency,

-                     identification of renewable sources of energy,

-                     encouraging investment in and support for the coal industry and use of clean coal technologies,

-                     promotion of environmental policy, including the measures to reduce green gas emissions,

-                     development, use and exchange of innovative energy technologies,

-                     development of information systems for monitoring national energy balances and

-                     expansion of private sector participation in the bilateral energy sector interaction.

At their meeting in April 2002 Russian Minister of Economic Development and Trade Herman Gref and US Secretary of Commerce Donald Evans highlighted concrete areas of future bilateral energy interaction, including:

-                     long-tern commercial energy contracts (including those to fill up the US Strategic Petroleum Reserve),

-                     expanded involvement of US companies in energy projects in Russia,

-                     a common strategy for the gas sector,

-                     development of Russia's transport infrastructure (including transit through Russia for US-destined oil) and

-                     a common strategy for operations in oil and gas sectors of third countries.   

Currently there are seven US-partnered joint ventures producing oil in Russia. The list of US companies engaged in energy projects in Russia includes Conoco, Occidental, ExxonMobil, Chevron-Texaco and BP Amoco and others. American companies continue to increase their presence in the Russian energy sector. Among the major Russian-US energy projects are the Caspian Pipeline Consortium with Chevron and Mobil, Sakhalin-1 with ExxonMobil, Sakhalin-3 with ExxonMobil and Chevron-Texaco, Northern Territories with Conoco.

Russia is also the fifth-largest export market for US-made oil and gas field equipment. Last year American companies exported $282 million of oil and gas field equipment to Russia.