Page 13 - FSUOGMWeek92020

FSUOGM
NEWS IN BRIEF
FSUOGM
RUSSIA
Russia produced a record amount of oil in 2019
Last year, Russia’s crude oil production (including gas condensate) rose by 1% to a new peak in modern Russian history, reports Bank of Finland Institute for Economies in Transition (BOFIT) in its weekly update.
Oil production reached 11.3mn barrels per day making Russia the world’s second largest producer of crude oil after the United States, according to the International Energy Agency (IEA).
“This year, Russian oil production is expected to remain close to last year’s level for most forecasts. Production growth will be curbed by Russia’s OPEC agreement, which was last renewed in December,” BOFIT reports.
Russia is also negotiating with OPEC on possible additional production restrictions due to the negative demand effects caused by the coronavirus epidemic.
February IEA and OPEC forecasts for this year’s crude oil demand forecast have been lowered due to the coronavirus. However, global oil demand is expected to continue to grow by just under 1%.
Last year, almost half of Russia’s crude oil, or about $270bn, was exported or 5.4mn barrels per day.
Exports increased by almost 3%, although contamination of the main Druzhba pipeline for exports in April limited oil supplies for several weeks.
According to the January-September statistics, just over half of Russia’s crude oil exports went to EU countries last year and more than a quarter to China.
Exports of crude oil amounted to $120bn last year and exports of petroleum products to $70bn (11% of GDP). In its February forecast update, the Russian finance ministry expects crude oil exports to grow by nearly 2% this year, but to decline thereafter.
February 28 2020
Russia produced a record 690bcm of gas in 2019
Last year, Russian natural gas production (excluding ancillary gas) grew by 3% to a set a new record of 690bn cubic meters, reports Bank of Finland Institute for Economies in Transition (BOFIT).
The growth was mainly driven by liquefied gas (LNG) production, which increased by almost 50% as the Yamal Peninsula LNG production started to reach full capacity.
LNG production last year was approximately 40 bcm (29.5mn tonnes), accounting for 6% of total gas production. Other natural gas production increased by
Week 09 04•March•2020
about 1%.
“According to most forecasts, Russian
natural gas production is expected to grow by 1-2% per year over the next few years. Production growth is mainly constrained by the demand outlook,” BOFIT said.
Natural gas production is very strongly concentrated in the Yamal-Nenets region
of Western Siberia, where there are long- established major deposits. However, production growth is focused on the Yamal Peninsula and Eastern Siberia. Novatek’s new LNG project, Arctic LNG 2, is underway in the Yamal Peninsula and Gazprom is in the process of deploying the Kovykta gas deposit in Eastern Siberia.
About a third, or 250 bcm Russian gas production was exported last year. Exports increased by almost 6% as LNG exports almost doubled. Exports of pipeline gas remained almost unchanged.
Russia’s LNG production is mainly export- oriented, with LNG accounting for 15% of exports last year. According to the January- September statistics, almost 70% of Russian gas exports went to EU countries and 15% to CIS countries. China accounted for just under 1% of exports. Russia’s gas exports last year amounted to $50bn (3% of GDP).
In its February forecast, the Russian Ministry of Finance expects gas exports to grow by a few% over the next few years. A gas pipeline to China was opened in December and deliveries are set to increase gradually.
According to preliminary plans, about 5 bcm of pipeline gas will be delivered to China this year and 10 bcm next year. However, due to the severe coronavirus epidemic in China, Chinese gas demand may remain below expectations.
February 28 2020
Zarubezhneft IFRS net profit up 16% in 2019
The net profit of Russian oil company Zarubezhneft went up by 16% on the
year to 13.5 billion rubles in 2019, as calculated under International Financial Reporting Standards (IFRS), the company said in a statement on March 3.
Consolidated sales revenue, including revenue from joint companies, increased by 1.1% to RUB92.9bn.
“In general, Zarubezhneft demonstrated high efficiency in 2019, and in 2020 the company aims to continue moving toward the goals announced in the strategy through quality transformation and using the best practices and market tendencies as the guidelines,” the company said.
An audit confirmed the ratio of oil reserve replenishment at 140%, Zarubezhneft said.
March 3 2020
Zvezda contracts seen
as condition for Severno-
Gydansky auction
New contracts for Russia’s Zvezda Shipbuilding Complex may become a compulsory condition for holding an auction to develop the Severno-Gydansky field, which is to become the resource base for independent gas producer Novatek’s liquefied natural gas (LNG) project Arctic LNG-3, Kommersant business daily reported on March 4 citing sources.
The Natural Resources and Environment Ministry is ready to offer the field for an auction, as asked by Novatek CEO Leonid Mikhelson, but, according to the sources, the presidential administration has added new license requirements, namely, transportation of LNG by tankers produced by Zvezda.
Spokespersons for Novatek, oil company Rosneft and the ministry have not answered the daily’s questions.
Zvezda Shipbuilding Complex is being built in Russia’s Far East by a Rosneft- headed consortium.
March 4 2020
EASTERN EUROPE
Belarus to purchase oil from SOCAR
The State Oil Company of the Azerbaijani Republic (SOCAR) is going to supply two tankers with a combined 160,000 tonnes of oil to Belarus.
“The first tanker cargo of around 80,000 tonnes of Azerbaijani oil for Belneftekhim will be shipped from the port of Supsa on or around March 20,” news agency Interfax quoted the deputy head of SOCAR’s public relations and events department Ibrahim Ahmedov.
Alexander Tishchenko, spokesman for the state petrochemicals conglomerate Belneftekhim, told Interfax that Minsk has signed a deal with SOCAR to supply two tankers with a combined 160,000 tonnes of oil. The oil will be delivered via the Odesa- Brody pipeline from Ukraine beginning in March.
Russneft and Neftisa, the oil units of Russia’s Safmar Group, controlled by Russian tycoon Mikhail Gutseriev, are going to supply around 400,000 tonnes of oil to Belarus refineries in March. Three industry sources told Reuters on February 27 that of the total, 90,000 to 100,000 tonnes will be delivered by rail.
Safmar was able to supply only 250,000
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