Page 88 - RusRPTApr19

9.0 Industry & Sectors 9.1 Sector news
9.1.1 Oil & gas sector news
Russian Ministry of Natural Resources has for the first time estimated the monetary value of Russia's hydrocarbon reserves, which is to be re- assessed annually, RBC business portal reported on March 14. As of end of 2017, the total reserves of oil were worth RUB39.6 trillion ($605bn). The reserves of natural gas were valued at RUB11.3 trillion ($173bn), and coking coal at RUB2 trillion ($30.6bn). Apart from that, the reserves of iron ore, diamonds and gold were estimated at RUB808bn, RUB505bn, and RUB480bn, respectively. The total aggregate cost of all the mineral and energy resources was estimated at RUB55.2 trillion or the equivalent of 60% of 2017 GDP. At the same time it must be noted that the ministry only calculated the fields and mines that already have an extraction licence granted and technical or investment project in place. Thus, the estimate is way below the valuation of actual untapped mineral and hydrocarbon reserves. In natural values, as of end of 2017 the ministry estimated that Russia had reserves of 9.04bn tonnes of oil, 14.5 trillion cubic meters of gas, 1,407 tonnes of gold, and 375mn metric carats of diamonds. The estimates for oil do not include Russia’s very extensive shale oil reserves – the largest in the world. RBC compares that to figures provided by British Petroleum in 2018, according to which proven oil reserves in Russia as of end 2017 stood at 14.5bn tonnes and of gas at 35 trillion cubic meters. Other estimates have put gold reserves at 5,500 tonnes.
Russia’s oil production was down 0.3% m/m in February driven by production cuts that are part of the OPEC+ deal, CTEK reported on March 4.
At the same time gas production grew 4.3% y/y as the state owned gas giant Gazprom ramps up production and has increased its exports to European customers.
Total Russian crude output was down 0.3% m/m, driven by the production cuts at all integrated oil companies under the OPEC+ agreement. The highest production cut, 1.8% m/m, was printed by Gazprom Neft, while Bashneft’s crude output was down a modest 0.3% M/m. Rosneft and Tatneft reduced production 0.6% m/m each, while Lukoil and Surgutneftegaz’s crude output declined 0.5% m/m. Non-integrated oil producers increased crude production 0.6% m/m, VTB Capital (VTBC) said in a note.
Russian gas production was up 4.3% y/y in February. Novatek’s production increased 17.1% y/y, driven by the ramp up at Yamal LNG. Rosneft, Lukoil and Surgutneftegas reduced gas production 1.4% y/y, 3.9% y/y and 3.5% y/y, respectively. Gazprom’s gas production was published at 42.7bcm in February, according to Interfax, implying an increase of 2.6% y/y.
“We calculate that Russian crude production in February was 0.7% below the October 2018 level (the reference point) and almost in line with the required level for February within the OPEC+ production cut agreement reached back in December 2018. We note that the highest contribution to the production reduction since October 2018 has been made by Gazprom Neft, which cut its
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