Whips and honey cakes

Thanks to three years of high world oil prices, the rouble devaluation of 1998 and improvements to the industry’s tax and regulatory system, Russia is enjoying an oil boom that is fuelling the country’s economic revival. Isabel Gorst writes

RUSSIAN OIL production surged by 9%, to 7.7m barrels a day (b/d), in 2002 and is expected to rise even faster, by 11%, to average 8.4m b/d this year. Most incremental output is being exported to world markets, where sales are expected to top 4.2m b/d this year, including at least 3.7m b/d to consumers outside the boundaries of the former Soviet Union. Oil companies tend to talk as if the good days will never end. Russia's energy strategy is more cautious, forecasting that output will grow to 9m-9.8m b/d in 2010. But it predicts growth will then tail off, with output reaching 9m-10.4m b/d in 2020. Everyone agrees that producing oil in Russia will become more expensive, as companies exhaust en