Russia’s Pivot to the East Sets a New Tone as WPC Returns to Moscow

By Pat Davis Szymczak, June 18, 2014

Oil&Gas Eurasia is excited to be participating in the 21st World Petroleum Congress, which this year is being held in Moscow. The event, held every three years, is organized by the World Petroleum Council, which was founded in 1933 and has a membership base of 65 countries representing 95 percent of global oil and gas production and consumption.

The triennial congress is informally referred to as the “Olympics” of the petroleum industry and covers all aspects of the industry from technological advances in upstream and downstream operations to the role of natural gas and renewables, management of the industry and its social, economic and environmental impact. 

Moscow last hosted the event in 1971, but for Russia, this year’s WPC is a first: the host country 43 years ago was actually the USSR.

According to an account of Moscow’s first WPC published in LUKOIL’s corporate magazine, Oil of Russia, issue № 3, 2011:

A key aim of Soviet leaders after the ouster of Nikita Khrushchev as Premier and Communist Party chief, was economic reform and stimulation of industrial production. “… the Party and political leadership of the Soviet Union began to examine seriously the prospects for generating deliveries of massive quantities of Soviet oil in the world market in order to acquire hard currency for solving its serious social and economic problems,” Oil of Russia author Alexander Anatolyev wrote.  

“In order to accomplish this, it was first of all necessary to show to potential Western partners the impressive prospects for the development of the USSR’s fuel and energy complex. The World Petroleum Congress (WPC), the largest of the industry’s international forums, was ideally suited for this.”

So as the story goes, 1,829 delegates from 41 countries met at the newly constructed Rossiya Hotel off Red Square in June 1971. After the congress closed, many of the participants joined in a tour of Soviet oil production and refining regions including: Volgograd, the Tatar Autonomous Soviet Socialist Republic, Azerbaijan, Uzbekistan, Georgia, Turkmenistan and Armenia.

Fast forward to 2014. The 21-storеy Rossiya Hotel, with its 3,200 rooms (said to be the largest hotel in the world, by the way) was demolished in 2006–2007 and today is still a big building site where something new will be built someday when those responsible decide what it is that they want to build.

And the Russian oil industry? As we all know, the USSR did succeed in developing markets for the export of Soviet oil and gas primarily to Europe to raise the hard currency needed to support its command-control economy. In the 1980s, hydrocarbon production began to decline because of a lack of investment in new technologies. As of 1991, the Soviet Union was no more.

For the most part, the tale of the post Soviet Russian oil and gas industry has been mostly a continuous loop that repeats the Soviet strategy first launched at the WPC held in Moscow in 1971: sell hydrocarbons on the global market for hard currency to fund the state