Page 98 - RusRPTNov19

9.0 Industry & Sectors 9.1 Sector news
9.1.1 Oil & gas sector results
Total Russian oil output was down 0.4% m/m in September at 11.2mmb/d , mostly driven by Gazprom Neft, Rosneft and Lukoil, which reduced output 3.6%, 0.8% and 0.7% MoM, respectively. Surgutneftegas, Tatneft and Bashneft produced at the same level as in August. Crude production at non-integrated oil producers was up 1.1% M/m.
Russian gas production was down 3.1% y/y in September, according to Interfax, held back by y/y drops in gas production of 5.8%, 7.9% and 0.8% at Gazprom, Lukoil and Novatek (including JVs), respectively.
Russian crude production in September was 1.5% below the October 2018 level (the reference point for the OPEC+ agreement). Given that Russian companies had agreed to cut production some 228kbbl/d, the output reduction in Russia over-fulfilled the required level by 1.1% (or by 3kbbl/d) in September. Overall, the production level during January-September 2019 was 11,199kbb/d, which is 36kbbl/d below the target level for 2019.
Gazprom Neft reduced oil production for the second month in a row, and reported the largest relative drop in average daily output among Russian oil companies in September. We believe that this is associated with the maintenance at Prirazlomnoye which started on 10 August and was planned to last until mid-September. We calculate that the greatest contributions to the drop in production since October 2018 have been made by Gazprom Neft (not accounting for the share in associates) and Tatneft, at -2.4% and -2.1%, correspondingly. Surgutneftegas, on the other hand, has actually increased production 0.1% (compared with October 2018), according to VTBC.
Gazprom’s gas production was down 5.8% y/y, despite the 9% y/y jump in exports, according to Interfax. Novatek’s consolidated gas production (including its share in joint ventures) was down 0.8% y/y, despite the 42.6% y/y growth of gas output at Yamal LNG. This was due to a 10.8% y/y decline in Nortgas’ production, coupled with flat output at Terneftegas.
98 RUSSIA Country Report November 2019 www.intellinews.o