Mechanisms of formation of Financing Investment and Innovation activity in the oil and gas complex of Russia

. This article examines the possibilities of attracting various sources of financing for investment and innovation activities of oil and gas enterprises in Russia in modern conditions, as well as assessing the possibility of attracting them, taking into account the financial condition of the industry enterprises. The research is aimed at clarifying the prospects for financing the development of the domestic oil and gas complex, taking into account the peculiarities of the current foreign economic and geopolitical situation.


Introduction
Hydrocarbon prices have soared in recent years, reaching or approaching historical highs.This is due to various factors, such as the special military operation in Ukraine, the significant increase in liquidity in the global financial system due to the COVID-19 pandemic and other related circumstances.Despite sanctions pressure from Western countries (interruption or slowdown of cooperation with foreign counterparts, including borrowing capital, exit from joint investment projects, bans on investment in energy projects of Russia) and restrictions in technological cooperation with foreign companies, domestic oil and gas holdings do not abandon major investment projects.Thus, in 2022, Russia's oil and gas industry was able to increase total investment by 20,7% relative to the previous period, reaching 4,26 trillion rubles [1][2][3][4], and investment in innovation and R&D by major oil and gas companies was also significant (Table 1).The further development of the oil and gas complex in Russia is accompanied by the following key problems: the lack of necessary investments and a relatively small number of innovations and import-substituting technologies.In the past few years, most of the investment in this area has been made through the endowment of oil and gas corporations.However, as domestic companies have limited resources of their own, the level of investment remains insufficient.This situation significantly limits the catalytic role of these investments for the development of the national economy and its innovation sector, which explains the lack of innovation and technologies that can significantly improve the performance of firms.
For the study, in addition to the main principles of financing investment and innovation activity of oil and gas industry enterprises (Figure 1), it is necessary to highlight the following features, which are generally characteristic of the investment activities of the oil and gas industry in Russia:  high capital intensity of the industry;  deposits with readily available hydrocarbon reserves have been exhausted, and it is necessary to mine -in remote and inaccessible areas;  major equipment used in the industry is usually highly worn out;  large capital investments take a long time to realize [5].In order to develop a methodology for financing investment innovation activities of the oil and gas complex, it is necessary to analyze the current financial situation of the largest companies in order to determine their strengths and weaknesses (advantages and disadvantages) in financial and economic development.Assessment of the current financial situation will also allow to study the possibilities of advanced development through the implementation of promising investment projects.The analysis will help to identify and classify the full range of available sources of financing investment and innovation activities of oil and gas companies, taking into account their suitability and accessibility in the current economic environment.
Qualification of sources of financing (attracted and own) is often discussed in scientific discussions, especially in the context of the issue of shares.This method of financing allows the enterprise to attract external investors while avoiding debt.It is therefore proposed that a dual classification be used, taking into account both the source and the type of funding received.

Methods
The article is based on research data, devoted to modern challenges in the field of attraction of long-term financial resources of oil and gas industry enterprises for investment activity.These studies are relevant in the light of the new economic conditions caused by the imposition of sanctions and other geopolitical and foreign economic difficulties.To analyze the financial condition of the enterprises, coefficient analysis methods were used, including assessment of liquidity, profitability and financial sustainability.Also the methods of fundamental analysis were used to determine factors that influence the capitalization of the company.

Results
As part of the study conducted for the preparation of the article, it was concluded that it was useful and expedient to separate sources of financing investment and innovation activities of oil and gas companies on internal and external and further subdivisions of external sources to borrow and attracted.In addition, a further classification of sources has been made according to the level of difficulty of recruitment under sanctions, as this aspect becomes particularly important in the current circumstances of the country (Figure 2).Vertically integrated oil and gas companies of Russia with state participation, for example, PJSC «Gazprom» and PJSC «Rosneft», as well as private company PJSC «Lukoil», seek to finance their innovation activities with their own funds, from net profits and depreciation charges.It is important to note that modern Russian oil and gas companies need to take an integrated approach to sources of financing innovative activities.This approach allows the use of all available forms and types of financing: self-financing (profit utilization and depreciation of companies), public financing (support in the form of direct payments or preferential taxation), equity financing, Bond financing (raising bonds to raise funds), venture financing (attracting high-risk capital from venture investors) and project financing (leveraging to finance innovative projects).From own sources of innovation and investment needs can be used: depreciation charges, profits left at the disposal of the enterprise, as well as a new instrument of financing -the implementation of CO2 emission quotas, the yield of which became record in 2022 [6][7].In a period of high revenues due to increased demand for oil and gas resources, domestic enterprises can use the profits to form a reserve fund, which will serve as a cushion in times of reduced demand and the need for new supply chains and infrastructure.

Sources of financing investment and innovation activity of oil and gas complex
Borrowing sources are medium-sized for investment purposes, owing to higher credit rates.However, this gap can be compensated by state support and initially high profitability in the studied economic sphere (for example, the profitability of sales of PJSC «Tatneft» in 2022 was 19.96%, economic profitability -11.95% [8]).
Project finance, as a source of external funding, was given a high level of difficulty in attracting funds.This is due to the fact that due to geopolitical risks and the current external economic situation, already initiated investment projects can be suspended or even cancelled completely.For example, since 2022 PJSC «NOVATEK» has been looking for ways to provide project financing for the plant «Arctic LNG-2» at a time when the majority of participating Russian banks were under new sanctions of the USA and EU [9].The main creditor of the project is VEB.RF bank, which was sanctioned by the EU and the United Kingdom, as well as by the SDN-list of the US Ministry of Finance, which creates risks of the SDN-list of the project «Arctic LNG-2», its shareholders and creditors, as well as stopping the selection of remaining credit funds and the eventual default of the project.In addition, a number of shareholders of the project, namely the French company TotalEnergies, stopped investment in «Arctic LNG-2», because the adopted EU sanctions prohibit new investments in energy projects in the Russian Federation.
Raising funds through the issue of equities is an important source for the development of the oil and gas sector, but it is the least affordable method of raising funds so far.The reason for this is not only a temporary break in the stock exchanges and the withdrawal of the international status of the Moscow Exchange, but also the decision of many oil and gas companies not to pay dividends in 2022 [10].This, in an uncertain and difficult economic and geopolitical environment, makes investment in oil and gas companies less attractive.
It is important to bear in mind that the key difficulties in finding and enabling additional sources of financing for investment and innovation are related to the financial situation of the oil and gas companies themselves.On this basis, it seems appropriate to conduct an analysis of the financial situation of companies in the oil and gas complex and to determine the relevant patterns in their development.

Discussion
A group of the largest oil and gas companies studied (Table 2) has been identified for financial analysis.The possibilities of companies to meet their financial obligations to counterparties on time (liquidity ratio analysis) were examined.Liquidity indicators of major oil and gas companies for 2022 are normal.In most caseshigh values of all calculated liquidity ratios.
One of the key indicators of financial sustainability is the self-sufficiency ratio, which shows the proportion of the company's assets that are self-sustainable.The high selfsufficiency ratio indicates that the company is sufficiently independent of external creditors and able to operate successfully in the market even under conditions of economic instability [11].Low self-sufficiency in the oil and gas industry may be a problem, as external sources of financing in the current economic situation are volatile and subject to sanctions factors.The situation with financial stability in this area is not advantageous, but it is necessary to take into account sectoral features, such as the sector's high capital intensity, which requires companies to attract large amounts of borrowed capital (Table 3).The profitability analysis allows to assess the efficiency of business and to determine how successfully the company uses its resources for profit.In the analysis of profitability (Table 4), it was determined that all obtained coefficients of the largest oil and gas companies significantly exceed the average of oil and gas industry in Russia.The attractiveness of investments in oil and gas enterprises and their ability to attract long-term financing largely depend on the company's market activity and its security policy.This factor is determined, on the one hand, by the current economic situation and, on the other hand, by the financial condition of the company itself.The shares of [12,13] three Russian oil and gas companies (PJSC «Gazprom», PJSC «Tatneft» and PJSC «Lukoil») for 2021 -2022 were considered.To see how the securities of a company react to changes in market conditions and the geopolitical situation.
All the oil and gas companies under review had a significant decline in the market value of securities.The market value of securities of PJSC «Lukoil» in December 2022 decreased by 32% compared to January 2021, PJSC «Gazprom» -by 41%, PJSC «Tatneft» -by 31% for the same period.Now the oil and gas complex is significantly affected by negative geopolitical and economic factors, which significantly reduces its attractiveness even for domestic investors.In addition, the high level of capitalization of companies does not protect them from the volatility of securities, and decisions of some companies on non-payment of dividends (PJSC «Gazprom», PJSC «Lukoil») worsen investment expectations of shareholders.Due to the unfavourable situation in the stock market, this instrument of investment and innovation financing is not rational for use in the present conditions.

Conclusion
Despite some problems related to the high dependence of oil and gas companies on debt and insufficient liquidity, which are characteristic of this industry, the profitability of the industry remains quite high, and there is no significant decline in revenue even under sanctions restrictions and the current geopolitical situation.On the contrary, large companies show an increase in revenue despite the depreciation of currencies.
Despite the difficulty of attracting various sources of financing, the negative trends in investment activity and the difficulties faced by the domestic business, the largest oil and gas companies continue to approve investment programs, to increase their overall financing, to invest in the material base, import substitution and innovative technologies, based on current economic realities, and to develop methods of adaptation and restoration of the investment climate.

Fig. 1 .
Fig. 1.Principles of Financing Investment-Innovation Activity of the Oil and Gas Complex in Russia [compiled by the author based on the results of the study] the investor E3S Web of Conferences 458, 05033 (2023) EMMFT-2023 https://doi.org/10.1051/e3sconf/202345805033

Table 1 .
Russian oil and gas companies' R&D investments in 2022.

Table 2 .
Analysis of liquidity level of Russian oil and gas companies for 2022.

Table 3 .
Analysis of the level of financial stability of Russian oil and gas companies for 2022.

Table 4 .
Analysis of profitability indicators of Russian oil and gas companies for 2022, %