Page 14 - FSUOGM Week 39

FSUOGM PERFORMANCE FSUOGM

Russian refining runs up 1.6% in August

RUSSIA RUSSIAN refining runs averaged 729,000 While most additional output last month was
tonnes (5.34mn barrels) per day in August, data exported, Energy Minister Alexander Novak
Oil output grew by published by the energy ministry’s CDU-TEK said earlier that all last month's surplus would
more than refining statistics provider shows, up 1.6% month on be sent to the country’s refineries, boosting fuel
throughput in August. month. The country increased oil and conden- supply and supporting their margins.
sate production by 5.2% m/m to 1.35mn tpd Supplies of oil to refineries via pipeline came
(9.9mn bpd), but most of the extra supplies were to 632,900 tpd (4.64mn bpd) in August, up
exported rather than refined at home. 1.3% m/m. Shipment via rail increased 3.3% to
According to CDU-TEK, 669,500 tpd 137,600 tpd (1mn bpd). There is some overlap
(4.91mn bpd) of the amount refined last month here, as some oil is first pumped via pipeline
was crude oil, representing an increase of only and then loaded onto rail tankers for delivery to
0.8% m/m. However, the volume of conden- refineries.
sate processed climbed by 11.6% to 59,500 tpd Some refineries also receive gas condensate
(436,000 bpd). through pipelines that are not part of the main
Russia was able to ramp up oil production in Transneft system, and therefore these volumes
August thanks to the easing of OPEC+ restric- are not included.
tions. Under the global pact on supply cuts, the Russian oil exports to non-CIS countries
country is able to produce 8.993mn bpd of oil via Transneft pipelines increased by 9.6% in
from August to the end of December, although August to 433,100 tpd (3.2mn bpd), while sup-
this quota covers oil only and not condensate. Its plies to Belarusian plants fell 21.7% to 47,000 tpd
quota for May to July was only 8.492mn bpd. (344,500 bpd). ™

POLICY

Russia unveils support scheme

for oilfield services

RUSSIA RUSSIA has shed light on its plan to support completed but not finished until OPEC+ cuts
the domestic oilfield services industry and end. Moscow is borrowing from the practices of
Major lender such as fund the drilling of hundreds of wells, ready US shale companies, which sometimes drill but
Sberbank and VEB.RF to come on stream when OPEC+ restrictions do not complete wells when oil prices are low.
could get involved in are eased. They are eventually finished when prices are
the scheme. Speaking at a forum in Tyumen on Septem- sufficiently high. The 3,000 wells are expected to
ber 24, Deputy Prime Minister Yury Borisov flow roughly 200,000 bpd of crude.
said special-purpose vehicles (SPVs) would be Major state lenders such as Sberbank
created, each consisting of a services firm and a and VEB.RF could get involved, providing
bank. The SPVs will attract credit to support the RUB400bn ($5.6bn) in soft loans.
services firms and pay for the drilling. The scheme’s second goal is to support strug-
OPEC+ reduced its cuts at the start of August, gling Russian oilfield services firms. The sharp
bringing back 2mn barrels per day of oil supply. decline in oil prices as a result of the coronavi-
Restrictions will be eased by a further 3.9mn bpd rus (COVID-19) pandemic led to the world’s rig
at the start of 2021 and end completely in April count slumping in May to its lowest level in over
2022. 20 years. Russian players are also affected by pro-
“Drilling will continue, the wells will be duction cuts under the OPEC+ pact.
developed, but not put into commercial produc- The oilfield services market in Russia is val-
tion until all our obligations under the OPEC+ ued at RUB1.5 trillion ($19bn), according to the
deal are fulfilled,” Borisov said. “After they are energy ministry. Around 46% of the market is
fulfilled, and demand is restored, we will have controlled by Russian independents, 36% by
the opportunity to quickly increase the volume the services divisions of vertically integrated oil
of production, if necessary, thanks to the created companies and a further 18% by foreign corpo-
infrastructure.” rations. Without support, the ministry warns
Earlier the Russian government suggested that the share of foreign companies could reach
that the scheme could see up to 3,000 wells 50% by 2022. ™

P14 www. NEWSBASE .com Week 39 30•September•2020