Gulf Oil and Gas accountACCOUNT

Russia September Oil Output Hits Record 10 mln bpd

Source: Reuters 10/2/2009, Location: Asia

Russia's monthly oil production exceeded 10 million barrels per day in September for the first time, approximately 25 percent more than the total pumped by nearest rival Saudi Arabia as OPEC persists with output cuts. Russia, now the world's largest oil producer, pumped 10.01 million barrels per day last month, up 0.4 percent from the 9.97 million bpd produced in August, which was also a record high at the time, Energy Ministry data released on Friday showed. Russian production has recovered in 2009 after suffering its first drop in a decade last year. The latest spike in output follows the August launch by state-controlled industry leader Rosneft of its massive Vankor operation in the Arctic.

But analysts said Russia's position as top producer might be temporary, as mature deposits in western Siberia run dry quicker than the country's oil majors can replace them with new finds.

"The pick-up seen today is the result of prior years' investment," said Chirvani Abdoullaev, senior oil and gas analyst at Alfa-Bank. "It's only sustainable until new fields reach a plateau."

Russia has emerged as the undisputed leader in world oil production this year after the Organization of the Petroleum Exporting Countries agreed to cut supply by 4.2 million bpd from September 2008 in a bid to prop up falling oil prices.

OPEC has kept official output targets unchanged at meetings since, most recently on Sept. 9. Oil prices CLc1 have risen over 50 percent this year to trade around $70 a barrel.

Russia's oil-heavy economy, in its first recession for a decade, has benefited from the recovery in prices. The country has grabbed market share from OPEC and analysts have estimated Moscow has gained over $20 billion from the grouping's cuts.

This has caused frustration within OPEC, particularly after Moscow rekindled a courtship with the organization at the end of last year, when a barrel of oil cost less than $40. While Russian output has grown, Saudi Arabia, the largest producer within OPEC by far, produced 8.1 million bpd in September, largely flat from the previous month. The Saudi figure excludes a type of light oil known as condensate, which is part of the Russian total, but even so Russian production remains significantly higher.

Russia has not been invited to recent OPEC meetings. But Energy Minister Sergei Shmatko said on Friday the group had invited Russia to take part in its December meeting in Angola.

President Dmitry Medvedev said on Thursday that $80 to $90 a barrel would be a fair price for oil in the current economic climate. Crude traded at a record $147.27 a barrel in July 2008.

"Russia has no interest in an endlessly high oil price. If it were to cost that much, we'd never change the structure of our economy," Medvedev said at a meeting on the farm industry.

"We haven't done anything in the last 10 years because oil kept rushing higher and higher," he said. "When the collapse came, we felt it harder than other countries."

Before this August, Russia's previous monthly record for oil production was the 9.93 million bpd achieved in October 2007. Rosneft led September's record haul, producing 2.40 million bpd, up from 2.39 million bpd in August. LUKOIL, its closest peer, produced 1.84 million bpd, ministry data showed.

Production sharing pacts, involving international energy majors such as ExxonMobil Corp XOM.M and Royal Dutch Shell, also raised output by 8.6 percent to 283,329 bpd.

Russian production has been boosted by the launch of Vankor and several other new fields, including LUKOIL's South Khlychuyu deposit and the Uvat, Kammenoye and Verkhnechonskoye fields owned by No. 3 Russian oil producer, TNK-BP.

Vankor is expected to pump 220,000 barrels per day by the end of this year, rising to 510,000 bpd when production peaks in 2014.

Challenge to Growth
Russia, however, faces a major challenge sustaining output growth. Its main producers are lobbying for tax breaks they say will make investment in remote deposits viable. "We still have a problem in mature producing regions like West Siberia, where investing in upstream projects is not commercially viable unless we see more changes in the taxation regime," Abdoullaev said.

Russia also boosted natural gas output. The world's largest gas producer produced 1.52 billion cubic metres (bcm) per day last month, up 8.6 percent from August, ministry data showed.

Gas export monopoly Gazprom produced 1.20 bcm per day in September, up 11.1 percent from August, the data showed.

Oil Field Services News in Russia >>

Singapore >>  10/9/2020 - Keppel Offshore & Marine Ltd (Keppel O&M) has secured a contract valued at approximately S$600m from an energy company for the engineering, procuremen...

Related Categories: Camp Building  Cleaning Equipment, Services  Communication  Corrosion Products/Services  Development  Exploration  Food Supplies  General  Labor Services  Land & Leasing  Mine Clearance  Oil & Gas Companies  Production  Service Companies  Skilled Labors  Transportation, 4X4 Trucks  Unskilled Labors  Utility Systems  Waste Disposal  Water Supply Services  Welding Products/Services 

Related Articles: Camp Building  Cleaning Equipment, Services  Communication  Corrosion Products/Services  Development  Exploration  General  Labor Services  Land & Leasing  Mine Clearance  Oil & Gas Companies  Production  Service Companies  Skilled Labors  Transportation, 4X4 Trucks  Utility Systems  Water Supply Services  Welding Products/Services 

Russia Oil & Gas 1 >>  2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 13 | 14 | 15 | 16 | 17 | 18 | 19 | 20 | 21 | 22 | 23 | 24 | 25 | 26 | 27 | 28 | 29 | 30 | 31 | 32 | 33 | 34 | 35 | 36 | 37 | 38 | 39 | 40 | 41 | 42 | 43 | 44 | 45 | 46 | 47 | 48 | 49 | 50 | 51 |

More News

Related Links

Gulf Oil and Gas
Copyright 2020 Universal Solutions All rights reserved. - Terms of Service - Privacy Policy.