The future turns dark for the Russian oil industry

But in the long term, the future of Russian industry, which finances a significant part of the government budget, has become cloudy. China, for example, is a tough bargain that pays only a fraction of the price of Russian natural gas now being paid by customers in wealthy European countries like Germany and Italy.

And production from the vast oil fields of Western Siberia and other legacy operations that kept Russia as the world’s leading oil producer for decades are in decline.

The new fields Russia is developing around the Arctic are “notable for the harsh operating conditions and high costs,” according to a recent study by research firm Energy Aspects.

In the past, Western companies took on difficult projects such as offshore LNG exploration, or LNG development, while leaving simple vanilla tasks to Russian competitors.

Where the capital and knowledge for these projects will come from is now open to question. The report said the most well-known of these developments, Vostok, which will stretch across a vast northern region, “could be disrupted as US and European sanctions place increasing pressures” on Russian industry.

On March 2, Trafigura, a Singapore-based trading company that funds part of Vostok, which is led by Rosneft, the state-controlled oil company, said it is “Review options” In connection with its 10 per cent, €1.5 billion holding in Vostok Oil, which is the vehicle for some of these developments.

Vostok, a cluster of projects the size of the North Sea, may be Russia’s hope in the coming years, but Ms Mitrova and other specialists say the Russian industry may continue to operate for some time even after large companies are sold or otherwise disposed of their investments.