World Hydrocarbon Markets: Effective Strategies of Players

• Main Author: Olga Valeryevna Dyomina
• Format: Article
• Language: Russian
• Published: Economic Research Institute of the Far East Branch of the Russian Academy of Sciences 2018-09-01
• Series: Prostranstvennaâ Èkonomika
• Subjects: effective strategy; world hydrocarbon market; oil processing; gas processing; oil and gas chemistry; processing; technological chain
• Online Access: http://www.spatial-economics.com/images/spatial-econimics/2018_3/SE.2018.3.067-087.Dyomina.pdf

The author made a comparative analysis of strategies of main players on the world hydrocarbon market; defined effective strategies of development of fuel and energy sector on every stage of technological chain of hydrocarbon transformation: 1st stage – extraction of natural resources, 2nd stage – primary processing, 3rd stage – deep processing. Effective strategies on the first stage assume planning the volume of extraction and geological exploration depending on the volume of processing on the second and third stages. On the second stage the array of effective strategies increases and is defined by the combination of two parameters: the availability of raw materials (domestic or imported) and orientation on the market (domestic or world market). On the third stage effective strategies are based on the integration with the previous stages, the array of strategies is defined by the combination of three parameters: type of raw materials (the product of gas or oil processing), orientation on the market (domestic or world) and specialization on the production output (mass multi-tonnage or knowledge-intensive low-tonnage). Realization of effective strategies provides maximization of added value from hydrocarbon processing as part of the technological chain in two configurations: 3–2–1 or 3–2 stages. The development of thermal power industry in Russia does not fit into effective strategies described above. The results of the current strategy are the following: on the first stage, Russia is one of the three leading players on the world market thanks to large resources base; one the second stag,e Russia is the second by the export of oil products but lacks in quality and variety; on the third stage, Russia had lost its position as a leader in ethylene production it used to have in 1985. The possibilities of maximizing the income from hydrocarbon extraction are exhausted, while the quality and variety of Russian products means that they can only compete on the raw resources part of the world market