Russian Oil & Gas Sector Headed for Major Shakeup

SURGUT CITY, Central Russia – Welcome to Surgut City , about 1,325 miles east of Moscow in the Surgut district, which in turn is the primary area of the Khanty-Mansi Autonomous Region (KMAR). I am here at the request of the Russian Ministry of Energy, to sit as an outside member on a task force reviewing production options for the next five years. But the "here" that I referred to is in Siberia – in every sense of the word. The cold snap I experienced before leaving Moscow has hit Surgut City with a much greater bite. When our government plane landed here at 3 a.m. one recent morning, the temperature had fallen to 35°F below zero. The pilot kept the engine running while we disembarked. Otherwise, the plane's oil lines could freeze. But there was no need to worry. A heat wave was to hit the next day – pushing temperatures all the way up to minus 3°F. For an inside look at the looming shakeup, please read on...