Western companies out of the game

The introduction of Western sanctions against Russia had a number of unintended consequences which begin to appear over time, and exert pressure primarily on Western business. Restrictions on the use of technology and Fund-raising played with Western business cruel joke. Russia has turned to its technology companies, which turned out to be not-so-poor condition, as was considered. A vivid example can serve as a technological engineering “PETON”.


photo: pixabay.com

The wind of change

The number of high-tech markets with high added value, according to experts, was permanently occupied by the Western companies, and the backlog of Russian companies were considered insurmountable. Entire industries found themselves without state support, were forced to adapt to the rules of the game of global Western players. Of course, expansion in closed markets are made through officials of any country, and Russia is no exception. Part of the state apparatus supported the Western players, who in the 90s wanted to settle in Russia, and, apparently, not free of charge.

What is the only situation in the aircraft industry, where on the verge of extinction turned out to be dozens of enterprises and design bureaus. Almost ruined was the energy engineering for decades to artificially thrown back such important areas as it and pharmaceuticals. Because Russia has a unique resource base one of the most desirable pieces were the market of oil and gas equipment and technologies, which went almost all the major foreign companies.

Decades later Russia, taking advantage of the radical changes of the world political system, decided to regain the markets with high added value through system of support of domestic producers, and what we see is the resistance of Western companies categorical unwillingness to lose market share and to prevent the possibility of the emergence of competitors. Even after a significant drop in hydrocarbon prices and the imposition of sanctions, none of the oil company of Russia is gone, not to mention the service and engineering giants, using all possible resources to lobbying to keep their positions, including questionable methods of competition.

Economy high value added

The policy of import substitution was taken before the imposition of sanctions, based on the understanding of the goals and objectives of the development of the country. Sanctions only showed the correctness of the started process to revive the industry and trend toward greater technological independence. A number of officials and managers, have somehow become agents of influence of the global Western companies. Now, the problems foreign companies have their problems that need to be addressed delicately, because you have to swim against the current. In the course are well-known techniques of information warfare.

One of the examples of the last month – the anxiety surrounding contractors of Gazprom, the largest gas producer and monopoly on pipeline exports of natural gas to third countries. The company, apparently, has reconsidered the risks from foreign engineering companies and have decided to diversify the pool of contractors in favor of domestic companies. As a result, the share of imported equipment and services Gazprom last year made up about 5 %, falling to a historic low.

In the same period, major contracts for services in the field of engineering was divided between the Russian companies that develop their own competence in engineering of oil and gas companies, have our own production base, qualified personnel and development, not conceding world counterparts.

To be in trend

We are talking about several large projects in the sphere of gas processing and gas chemistry, which can change the balance of power in the Russian and international Energy industry. The point is the strategic bet on the economy is high value added, which is in contrast to gas exports can create in Russia a new technological advance, high-skilled jobs and, most importantly, to leave in the economy the billions of dollars that used to simply go into the pockets of foreign companies.

For example, specialists of Ufa enterprises PETON busy on the construction of the Amur gas processing plant (GPP), which is one of the main buildings of the country. The Amur gas processing plant will play a key role in the development of Russian oil and gas industry in the coming years. The fact that the capacity of this complex will be processing gas supplied to China through the “Power of Siberia”. This pipeline is planned to annually supply 38 billion cubic meters of Russian gas. The first deliveries of raw materials should start in the next few years. The project is implemented within the program of import substitution.

The trend in oil and gas engineering aims to attract Russian companies to the adaptation of foreign technologies, localization of equipment and management of projects by domestic contractors. In this vein, a large project on the territory of Yamal, where the unit will be constructed of stabilization of condensate Achimov deposits in the Nadym-PUR-Taz region is expected not only construction and installation works and supply of equipment of Russian production. The presence of Russian contractors, who officially participate in the program of import substitution through the whole manufacturing chain, of course, this may not like those who previously offered to these projects of foreign equipment and services.

Russian companies are already deeply integrated into such projects as: construction of the Urengoy condensate treatment plant, the gas pipeline “Power of Siberia” reconstruction of Astrakhan GPP, Orenburg GPP, the Omsk refinery, and many other complex objects.

Growth point in the TEK

To understand the scale of what is happening in the Russian Energy sector changes it is necessary to say that in the energy industry annually invested about 1.5 trillion rubles. It’s about 2 percent of GDP. In Western countries, as a percentage of GDP, this figure could reach 20 percent. When scaled to the level of advanced countries, Russia may come to the figure of 15 trillion of investment annually. It will be knowledge-based, technological driver for future growth of the country. In this part of the program of import substitution for the Russian market is a chance which you must use to service was the impetus for the development of Russian science, industry and technology.

Of particular significance for Gazprom has today and the creation of infrastructure for sale of LNG from the outlet to the Black and Baltic seas. It is the plants and port infrastructure, which will help to diversify gas sales via the pipeline network and become a global player in the global gas market. At this point the competition starts at the political level. If Russia will be able to build LNG infrastructure on their own, with the involvement of domestic contractors, any sanctions and trade war with the use of political resources will be ineffective.

And in this place wakes up an unhealthy interest in the domestic contractors of Gazprom. The charges relate to contracts that supposedly won without competition. But no reason not to say that the competition still takes place, and Gazprom imposes to the companies the entire set of qualification requirements. As for banning foreign contractors to part contracts, the preferences for the manufacturers of technologies and services in strategically important areas are engaged in all technologically developed countries, including the US and the EU. It is a question of protecting national interests.

In the end, we have the classic impact of external forces on domestic service market in the energy sector, which Russia has decided to retain, and not so much in order to obtain room for manoeuvre in case of introduction of new sanctions, but rather to create in Russia one more point of growth in the sphere of high technologies.

Sanctions . Chronicle of events

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