Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Oil Sector To Boost Marine Industry

Russia expects a revival of its ship- and oil platform-building industries as billions of dollars of private and state funds are invested to tap new offshore fields, Industry and Energy Minister Viktor Khristenko said Thursday.

"There will be 30 to 35 platforms for the shelf development. If you are aware of how technologically atypical they are, it brings you to some $15 billion to $20 billion in investments," Khristenko told a news conference after a weekly government meeting.

Many of the country's shipyards went bankrupt or remained without orders for years after the collapse of the Soviet Union, losing business to companies like Singapore's Keppel, the world's largest builder of offshore oil drilling rigs.

Russian and foreign firms have placed orders worth billions of dollars at foreign shipyards in the past 10 years to acquire platforms and tankers for new oil deposits. But Russian suppliers have only received one large order in the past five years, from state-controlled Gazprom for its Prirazlomnoye oil field in the Kara Sea.

Khristenko said the number of orders inside Russia was poised to rise sharply as Gazprom is preparing to build new platforms for its giant Shtokman gas deposit in the Barents Sea.

New fields are due to come on stream off Sakhalin, and active exploration is also planned in the Arctic Sea to offset declining production in western Siberia.

The shipbuilding industry has performed better than the platform-building sector as Russian firms have placed a number of large orders for small and midsized tankers in recent years.

Khristenko said orders would rise. "Russian shipyards currently cannot build ships with deadweight of over 70,000 tons. It does not mean we want to build ships with deadweight of 500,000 tons. This is done very well today by China.

"But what we need are ships with deadweight of 140,000 to 160,000 tons to work on the Baltic, the northern seas and in the Far East," he said.

Khristenko said foreign shipyards would still cover the bulk of the country's needs until 2012, as a large portion of orders had been already placed, but that the situation would change after that.

The government expects three new shipyards to be built in Russia and plans to invest 90 billion rubles ($3.67 billion) from the state budget up to 2016 into the federal program of maritime technologies development, approved on Thursday.

The key challenges remain rising wages, the strengthening of the ruble and low productivity.

"Together, these factors worsen the industry's position on the foreign and domestic market," Khristenko's ministry said in documents prepared for the government meeting.