Russia is to use it position as the world’s largest oil producer to double its Reserve Fund this year, Prime Minister Vladimir Putin has vowed.
Oil companies in the country are also to invest a combined total of $300 billion over the next three years, reports suggest, as Putin made his annual address to parliament on Wednesday.
Putin said that Russia is now the world’s largest producer of oil with 505 million tonnes per year.
“The increase in production came from new oilfields in East Siberia, as well as the Caspian Sea,” Putin told parliament.
Putin plans to double Russia’s Reserve Fund this year to RUB 1.43 trillion ($50.94 billion) on the back of a spike in oil prices caused largely by unrest in the Middle East and North Africa.
"The current beneficial environment in raw materials and hydrocarbons should not make us relax. The oil boom we are witnessing only underlines the need to move quickly to a new model of economic development.
"We estimate that growth in energy prices will bring additional RUB 1.14 trillion to the Russian budget. I think it is unwise just to eat that money, using it for current needs.”
Despite Putin claiming Russian oil companies are gearing up for RUB 8.5 trillion of investments over the next three years, he also pointed to a need for focus away from the core energy industry.
“We have to bet on the domestic market, on dynamic development of the non-oil and gas sector."
Putin delivered his address at a time when BP is trying to negotiate terms on a stalled $16 billion investment plan in the country through Russian energy giant Rosneft. The UK supermajor may take some heart from his comments on outside investment in the country going forward.
“We are aiming for $60 billion to $70 billion in annual foreign direct investment in Russia in the near term, and of course to increase that level further.