Kippreport investigates if oil prices aren’t the only cause for the market slumpAugust 27, 2015 12:00
Russia oil output stays ahead of Saudi in July
Daily output of 10.26 mln bpd seen in May 2011, Oct 2010; Saudis catching up as spare capacity comes online; Rosneft announced record 2.4 mln bpd in July; Gas output falls 7.6 pct on daily basis month/month
August 3, 2011 10:56 by Eva Fernandes
Russia also pumped 10.26 million bpd in May this year and in October 2010. In June the rate was 10.2 million bpd.
Rival Saudi Arabia pumped as much as 9.8 million bpd in June, an increase of as much as 900,000 bpd in response to the loss of Libyan supply after it failed to persuade OPEC of the need for a coordinated increase.
But while the kingdom had the spare capacity to ramp up production by nearly 10 percent in a month, Russia’s top oil companies are struggling to grow by just a few percent a year.
Analysts have forecast that 2011 production will average 10.26 million bpd, in line with July’s level, for a total gain of roughly 1.1 percent.
Total output is up around 1.2 percent on a daily basis from July 2010 levels and up around 0.8 percent since the beginning of this year, Reuters data showed.
While smaller projects operating under production sharing agreements were holding production aloft for much of early 2011, state oil company Rosneft took the lead in July, the data showed.
Russia’s top oil producer said it hit a record 2.4 million barrels per day in July, with an increase in output at its new Vankor field and extra drilling at its biggest unit, Yugansk, accelerating its current growth rate to 1.5-2 percent.
Russia’s Soviet-era oil heartland is on the decline, and the government is working to provide incentives to coax capital-intensive new fields on line.
Deputy Prime Minister Igor Sechin, Russia’s oil tsar, has put forward the case for multi-billion dollar foreign investment in harsh, remote new oil provinces as a means to guarantee supply during times of shock.
But the country is struggling to lay the economic foundations for the necessary investment in new fields: a set of new tax policies designed to encourage production and export of crude oil, reward new investment in ageing West Siberian fields and force oil companies to upgrade their refineries.
The government had hoped impose a new export duty regime in August. But a deficit of gasoline during the peak summer driving season made regulators reluctant to drop protective gasoline export duties, and some refiners are still lobbying for exceptions.
Prime Minister Vladimir Putin had ordered the government to sort out differences over the new duty regime in mid-July, but ministerial meetings are now expected to continue into mid-August.
Natural gas output stood at 48.40 billion cubic metres, down from 50.67 bcm in June, a fall of 7.6 percent on a daily basis.
The decline is probably seasonal, but analysts are watching to see whether export customers who buy from Gazprom will reduce offtake in the second half, when the price they pay under Gazprom’s oil-linked long term contracts is set to rise sharply.
(Reporting by Olesya Astakhova, Melissa Akin and Gleb Gorodyankin; editing by Jason Neely)