Page 83 - RUSRptOct18

9.0 Industry & Sectors 9.1 Sector news
9.1.1 Oil & gas sector news
Gas production at G azprom might exceed 495bcm , Kommersant reports, citing CEO Alexey Miller. The company’s production, which currently stands at winter levels, might reach the highest levels since 2011 amid the increased demand in Europe and the lack of tangible growth of production by independent producers in Russia. Currently, underground gas stocks in Europe stand at 79bcm, 4.5bcm below the previous year, which might require Gazprom to increase supplies in September-December. We anticipate gas production at some 494bcm, what is broadly in line with the CEO’s guidance and 4% above the company’s most recent official plans, of 476bcm. Current demand trends also seem supportive to us. Bankers also see upside risk to our forecast for the company from the unusually high European gas prices, which have hit record highs since 2013 at $344/kcm at NBP.
Russia can increase production of liquefied natural gas (LNG) to 83mn tonnes by 2035 from the current 21mn tonnes, Head of Department of Oil and Gas Production and Transportation at the Russian Energy Ministry Alexander Gladkov said at the Sakhalin Oil & Gas Conference & Exhibition. "From the current 21mn tonnes, LNG production in Russia will grow to 83mn tonnes," he said. According to Gladkov, the Ministry of Energy allows the possibility of using additional incentives for the development of the industry. "We are ready to continue to consider the possibility and approaches to stimulate LNG," Gladkov said. According to him, Russia by 2035 can achieve a 15-20% share in the world LNG market against the current 4-5%.
Russia's oil output in August 2018 remained flat month-on-month at 11.21mn barrels per day (bpd), according to the data by the Ministry of Energy. Previous estimates showed that relative to the November 2016 levels the output has been cut by 0.032mn bpd or only a third versus the 0.1mn bpd cut implied by the 23 June 2018 relaxation of the previous Opec+ production cut agreement . Previously Russia's Minister of Energy Alexander Novak said that crude oil output in the country is expected to grow almost 1% year-on-year in 2018 and 2019 to 551mn metric tonnes (mnt) and 555mnt, expanding the previous outlook by over 3mn tonnes. Surgutneftegas oil company posted a solid 2.2% m/m increase in production in August, while Rosneft, which was the fastest growing oil producer y/y in January-August (2% y/y) showed 0.4% m/m output growth in the reporting month. Lukoil and Gazprom Neft demonstrated 0.3% m/m and 0.2% m/m growth, respectively, while Tatneft and Bashneft showed 0.8% m/m and 0.6% m/m, respectively. In August Rosneft said its oil production has already returned to its pre-Opec+ deal levels , a high it struck in October 2016, or a 0.12mn bpd increase on the capped deal limits, and it can lift output another 0.2mn bpd in the third quarter of this year.
Ukraine's Naftogaz is insisting that Gazprom compensate it for losses incurred from the need to purchase gas in the EU after its contract with Gazprom was amended by the Stockholm Arbitration Court in Dec 2017. The contract volume was cut 10x to 5bcmpa and the pricing formula was changed
83 RUSSIA Country Report October 2018 www.intellinews.com