According to reports, the Bashkortostan region of Ufa is fast developing into a major oil and gas producer. Ufa has ambitious plans to exploit geologically diverse but productive shale deposits in the region. The region is situated in the so-called ‘oil triangle’, between Russia, Iran and Central Asia. It lies in the north west of Russian Asia.
The Bashkortostan economy, according to most Russian analysts, is witnessing great potential, with oil and gas revenues anticipated in the forthcoming years. The healthy financial status, low interest rates and sound money position of Ufa have prompted the International Financial Reporting Standards to change the outlook on the Russian economy, the agency stated. The new positive outlook for ufa is the reason why many international banks are now investing in the country, according to estimates. The local currency of ufa is currently valued at around 1.7 rubles, which is slightly higher than the national currency.
The first objective of UFA is the establishment of a purely secure economic platform. The government of ufa has been consistent in its commitment to achieving this goal, meeting all of its obligations regarding the implementation of a balanced economic system, both on the monetary and the fiscal side. The new framework provides for a fully fledged increase in the volume of gas exports, with the introduction of new terminals in Kazbekova, Taldy and Krasnodon. A massive construction project is also being executed in the region of Taldy, in order to expand the existing petroleum refineries there and to build new ones. A further ambitious plan envisaging the development of a massive liquefied gas plant in cooperation with China and India is also under consideration. In the coming years, one of the objectives of ufa will be the introduction of a comprehensive scheme for the development of the economy and raising the level of domestic consumption.
The success of the ufa administration in accomplishing these aims relies largely on its ability to inspire confidence in foreign investors. In order to do this, it has adopted a policy that emphasizes transparency and full disclosure of all relevant information, particularly on the beneficial factors involved in investments. Among the measures implemented in order to strengthen the control of ownership of assets by companies resident in Russia and other countries, the registration of all foreign assets is being made compulsory. The same policy is being followed in the registration of stocks and the purchase of bullion and coins.
The most important decision that was taken by the authorities concerned with ufa was the signing of the agreements relating to the licensing of oil production by Kazbekistan and Taldy. This follows on from the signing of the accession agreement with the European Union. This implies that the country’s oil production will be able to reach the quota stipulated in the arrangement. The agreement was also signed on the same day that the first foreign crude oil carrier was registered in Russia. A further agreement in this regard was reached with the International Organization for Mineralogical Sciences (OOMS).
The overall volume of investment in the oil industry in the Russian Federation is estimated at around $300 million a year. This figure includes almost half of the total amount invested in the pharmaceutical industry, which comes to almost twenty-nine percent of the total volume of capital investments. At the moment, almost a quarter of the total volume is earmarked for oil and gas extraction. Some of the significant results resulting from this are the availability of cheap energy sources and cheaper fuel for industrial usage. Furthermore, the volumes of gas and oil that are produced annually is now expected to reach about seven hundred and seventy thousand cubic meters, up from around six hundred and fifty thousand in the last year.
On the one hand, the authorities in the Russian Federation consider the advantages of undertaking such measures, together with the significant financial benefits. Consequently, the authorities in this country have approved considerable monetary incentives for foreign corporations to invest in the production of ufa and qo by Russian producers. In addition to that, the authorities decided to make the development of drilling rigs in the Arctic offshore of Stavroskoy and Kaman in Russia compulsory, in accordance with the agreements signed in Rusal, Norway, on 13 June 2020. On the other hand, the decision was made in line with the objectives of protecting the biodiversity of the Arctic environment.
Besides, the authorities decided to ban all the new applications of ufa and qo in Russia starting from the coming of the next fiscal year 2020. This measure was confirmed on 25 January, as the head of the State Statistics Council, Alexeyevsky, stated that the ban will help to stabilise the market in the next two years. Moreover, the authorities decided to restrict the use of gas in the pipes of heating systems, electricity generators and other utilities, starting from the coming of the next financial year 2020. These decisions were confirmed by the Ministry of Finance of Russia, as it aims at restricting the development of oil and gas infrastructure in the Arctic.