Russia outsourcing oil tanker production

Russia's most active oil and gas fields are shifting further to the north and closer to Russia's eastern coast, a development which is driving demand for new oil and LNG tankers.

But with the country's ship builders mostly focused on military vessels, Russian companies are looking abroad for commercial ships.

Russian oil companies are ordering tankers made abroad, which will help diversify its export routes. One such tanker is built by Korea's Samsung and will deliver oil from the northern Varandei field to consumers in Europea and America.

It's the third ship destined for Russia. However, Russia is looking to cultivate its own shipbuilding industry under the leadership of a new government corporation.

Starting small by building fishing boats and icebreakers Russia wants to harness international expertise.

“We are working together with Cuba and Venezuela. We have also signed agreements with Samsung, and are looking at the possibility of co-operation with DEO Shipbuilding Corporation. We need to learn from them. We borrow staff and technology,” said Vladimir Pakhomov, president of the United Shipbuilding Corporation.

The creation of a government corporation, unifying all dockyards and providing centralised financing and government support is seen as essential to the developing industry. Analysts say that the potential is there.

“Russian potential could be higher than European and Asian producers like Korea and China. The shipbuilding corporation is to allocate contracts from Russian companies like the Sakhalin 3 project to Russian shipbuilders for the construction of tankers,” said analyst Sevastyan Kozitsin of BrokerCreditService.

As contracts begin to flow to Russian producers, analysts expect a boost to other companies, including component manufacturers and metal producers.