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9.0 Industry & Sectors 9.1 Sector news
9.1.1a Oil & gas sector results
Oil and gas sector crude and condensate production in Russia down 0.7% m/m in June, gas output fell 12% y/y and there was full compliance with OPEC+.
CDU TEK has published its oil and gas production data for June. Russian crude oil and condensate production fell 0.7% m/m to 1,272kt/d (9,286kbbl/d).
Surgutneftegas, Lukoil, Tatneft and Bashneft cut liquids output 1.3%, 0.2%, 0.2% and 12.9% m/m, respectively, while production at Rosneft (excl. Bashneft) and Gazprom Neft grew m/m (up 0.8% and 0.2%, respectively).
In June, the production of natural gas declined 12% y/y to 47.7bcm. Novatek’s standalone production was down 9.9% y/y. Gas output declined across integrated oil companies on a y/y basis.
The reduction in liquids production in June of 0.7% m/m follows the 17% m/m decline in May. We remind readers that the OPEC+ oil production quota for Russia excludes gas condensate. While the gas condensate production data for June is not yet available, we estimate, based on the overall liquids output in June and taking daily condensate production equal to 92kt/d (the actual rate for May, as per Interfax), that Russian crude oil production might have been around 8.5kbbl/d in June. The Russian oil production quota stands at 8.5mmbbl/d, which means that Russia was compliant with OPEC+ restrictions in June. This compares positively with the 96% compliance in May (according to Interfax, citing the Ministry of Energy).
The detailed June production data for subsidiaries is not available yet. However, we note that in May, Rosneft continued to reduce output at Yuganskneftegaz (where production declined 19.6% m/m) and Vankorneft (-9.2% m/m), while large declines were also recorded at Uvatneftegaz, Nyaganneftegaz and at brownfields in Central Russia. Gazprom Neft has significantly scaled back production at Noyabrskneftegaz, after a marked increase in April. Lukoil cut production in Western Siberia and Komi (-25% m/m).
The overall reduction in gas production in Russia was in line with the trend of the recent months. Based on Novatek’s operating data, we note that gas output at Yamal LNG and Nortgas was down 18% y/y. At the same time, output at Terneftegaz and Arcticgas was up 1% y/y and 11% y/y, respectively, meaning that Novatek’s consolidated production was down just 5% y/y.
75 RUSSIA Country Report August 2020 www.intellinews.com
