New Challenges Faced by Russian Oil and Gas Sector in Transition to a Low-Carbon Economy

Abstract

The requirement to reduce the volume of greenhouse gas emissions generated as a result of economic activity is one of the key factors that will have a significant impact both on the external economic situation in the long term and on the development of companies in the energy sector, primarily in the oil and gas sector. We found that in Russian oil and gas companies, the development of mechanisms that contribute to the decarbonization of production is at an early stage of their development and not a single vertically integrated oil and gas company has reevaluated carbon units throughout the entire life cycle, especially with the inclusion of the stage of creating primary infrastructure. The purpose of the study is to propose a methodology for accounting for the carbon footprint at the stage of construction of infrastructure facilities by oil and gas companies. We examined the possibility to reduce carbon footprint by using carbon dioxide accounting methods when choosing a method for utilizing logging residues generated during the construction of a section of the Gazprom PJSC gas pipeline in a wooded area. The study showed the need to develop methods for accounting for carbon units along the entire production chain (from design to consumption) to introduce methods for regulating carbon dioxide emissions. We concluded that the management of oil and gas companies needs to start transition from the principle of cost savings to the principle of decarbonization as soon as possible.