Page 88 - RPTRusFeb17

9.0 Industry & Sectors 9.1 Sector news
9.1.1 Oil & gas sector news
Russia's oil production increased by 0.9% month-on-month to 46.1mn tonnes in December 2016, s lowing down from 3.5% m/m growth seen in November after the output cuts agreed with Opec took effect, according to Rosstat statistics agency data released on February 28. In 2016 overall, oil output gained 2.5% year-on-year to 547.6mn tonnes of oil. The record-high 2016 output is in line with the energy ministry's previous forecast. The ministry's target of 547.5mn tonnes was increased from earlier estimates of 540-544mn tonnes and the economy ministry's forecast of 538mn tonnes of oil to be extracted in 2016. By other estimates of total oil and gas condensate output, Russia's output stood at 11.2mn barrels daily in October before the Opec deal. In February, daily output declined to 11.1mn barrels daily, Reuters reported on March 1. Russia started cutting production in early January by 100,000 barrels daily m/m in compliance with the deal, helped by extreme winter conditions in some main extraction regions. The rise of oil prices in late 2016 did not prevent the contraction of oil exports revenues for the year overall. Rosstat said $59bn worth of Fx revenues came to the accounts of exporters in 2016, down by 32.2%. In 2015, Fx oil revenues contracted by 40% to $87bn.
Global stocks of crude oil began to decline for the first time in over a year in January due to a deal struck with OPEC at the end of last year, Qatar's Energy Minister Mohammed Bin Saleh Al-Sada said at a conference on February 23, Vedomosti reported. An OPEC summit in November 2016 in Vienna agreed to cut oil production to a level of 32.5mn barrels per day. Russia agreed to a cut of 300,000mbd. Growth in oil demand has accelerated, he said. If the demand last year grew by 1.2mn barrels per day, but this year will grow by 1.4mn barrels, and will increase, the Minister of Energy of Qatar added. By the end of 2017 the oil market should stabilize thanks to the OPEC deal. He later told reporters that OPEC countries have implementing the agreement on the reduction of oil production by 94%, while the countries outside of OPEC by less than 50%.
Iran has said it will start selling 100,000 barrels of oil a day to Russia
within the next 15 days with payment to be made half in cash and half in goods and services, Iranian news agencies reported on February 21. Iranian Oil Minister Bijan Namdar Zanganeh provided details about the agreed oil sales after meeting Russian Energy Minister Aleksandr Novak in Tehran.
Russia will reduce oil production in February by more than 117,000 barrels daily within the framework of production limiting agreement, Russia’s Energy Minister Alexander Novak said at the end of February.
Russian President Vladimir Putin has ratified the agreement with Turkey on building the strategic €11.4bn T urkish Stream undersea pipeline , Russian news agencies reported on February 7. The signing is a key moment in the rapprochement between Moscow and Ankara that has occurred since differences were resolved over the shooting down of a Russian fighter jet by
88 RUSSIA Country Report February 2017 www.intellinews.com