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has found. The cost of producing a single barrel of Brent crude oil came in at around $42 for Russian onshore projects, and $44 for offshore projects, IHS Markit estimated. That was more than twice the $17 per barrel production costs in Saudi Arabia — the cheapest in the world. Brent crude is currently trading at $62.40 a barrel on the world markets. The analysis, conducted by IHS Markit and published alongside Saudi Aramco’s initial public offering (IPO) prospectus, found offshore projects in Venezuela had the highest break-even price in the world at $63 a barrel, followed by China at $55-60.
Only 41%, or 548mnt, of Surgutneftegaz reserves are commercially viable in the current fiscal and macroeconomic climate, which is the lowest share among Russian oil integrated companies, Vedomosti reports, citing the results of an analysis prepared by the Ministry of Energy and the State Commission on Russia’s Mineral Resources.
Tatneft has the highest share of commercially viable reserves among integrated oil companies, at 86.2% (or 564mnt). The shares of the commercially viable reserves of Rosneft, Gazprom Neft and Lukoil stand at 69.5% (3.9bnt), 63% (1.0bnt) and 60% (1.5bnt), respectively.
The average share of commercially viable reserves is 65.1%, or 11.2bnt in total, the paper writes.
The ministry’s audit was done as a precondition for the further extension of the current practice of providing tax breaks. The report provides no information about the criteria used to verify the commercial viability of the reserves. As a result, the implications for the companies’ investment stories is limited, say analysts. The market has been given few specific details to add to the established general picture about the maturity of Surgutneftegas’ western Siberia oil fields and Rosneft’s large reserve base.
9.1.2 Automotive sector news
Sales of new passenger cars and light commercial vehicles (LCVs) in Russia continued its decline, decreasing by 5.2% in October 2019, according to the report by the AEB Automobile Manufacturers Committee overseeing the industry.
As reported by bne IntelliNews, the car market has been struggling to recover this year. It put in some growth in March after several months of decline, but the recovery has stalled and sales have failed to gather any momentum.
“Total market sales in October underachieved last year’s result by 5.2%, firmly keeping the market on the path of a slow but continuous erosion of the much-needed volume gains secured in the years 2017-2018," the head of the AEB Joerg Schreiber commented.
In January-October overall the market declined by 2.4% to 1.5mn vehicles sold. "This is not the direction the industry wants or needs, of course, but it is hard to see at the moment where a change to the better should be coming from any time soon,” he added.
While the among the top ten bestselling models so far, all models are locally produced, same as in the previous months, the bestselling model Lada of
94 RUSSIA Country Report December 2019 www.intellinews.com
