With the worlds largest oil and natural gas reserves, second in coal production and eighth largest oil assembly, President Vladimir Putin draws grandiose plan for the countrys hydrocarbon reserve encouraging drilling and investment plans aimed at further development. Private investments, domestic or foreign is however, a big no-no, rather state government plays the steward to Russias energy patrimony or to say serve the national interest.

Hydrocarbons are an extremely important sphere of our potential cooperation Putin says in an interview but I would like to stress: we are already cooperating in the electric power, primarily engineering for the electric power sector.

Given todays high oil prices, state government sounds positive to funding new projects. Additionally, Indian and Chinese government shows willingness to do business with Russian companies with their investment criteria more in line with the approach favored by their Russian hosts. Putin further stressed state government to have larger share while a meager chunk gifted to private investors mainly in electricity sector.

The post Cold-War relics witnessed Russian industries as highly inefficient, combined with under-nourished investment opportunities and mismanagement dominating the sector; of which petroleum poised to have a serious impact overall. Further huge infusion of capital, technology and negligent exploration management hit the production to a record-low and decline. This is return could have foiled Putins plan and countrys national honor.

Putin must recognize that to put back the countrys faltering image, he needs a petroleum sector with well-managed and well-capitalized oil, gas and pipelines. Russias oil and gas industry being the backbone to the countrys economy generate fifty percent of the total revenues and taxes and most of foreign exchange, need balanced combination of public and private governance.

A faltering Russian oil sector would be a disaster for the world economy as well as for Russia itself.