Breaking into Russia's vast energy market

The opportunity for equipment makers is immense, but the competition is stiff

Economist Intelligence Unit

October 25, 2012

By Robert Stowe England

Kudu Industries sees enormous opportunity in Russia, the world’s largest oil producer. “Russia is second only to the United States in the number of wells that require pumping,” said Ray Mills, the company’s owner chief executive officer. The Alberta, Canada-based company makes pumps that allow oil rigs to run more efficiently, using technology unavailable from Russian competitors. Yet although Kudu has been exporting its pumps to Russia for 12 years, it still faces stiff challenges expanding its business there.

Kudu’s frustration is shared by a lot of other Western firms trying to break into the Russian oil patch. Russia’s huge oil and gas production infrastructure is aging and needs to be replaced. Western oil and gas field equipment makers now have a timely and expanded opportunity to break into this lucrative market.  But trying to take advantage of that opportunity means confronting a host of challenges.

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Robert Stowe England is an author and financial journalist who has specialized in writing about financial institutions, financial markets, retirement income issues, and the financial impact of population aging.

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