Page 97 - RusRPTJun19

9.0 Industry & Sectors 9.1 Sector news
9.1.1 Oil & gas sector news
Russia remained the world’s second largest oil producer after the US in March, with its output falling 0.7% on the month to 10.563mn barrels per day, the Joint Organizations Data Initiative (JODI) said in a report on Monday. The US produced 12.11mn barrels daily on average in March. Saudi Arabia is on the third place with a daily output of 9.787mn tonnes. Russia’s oil refining fell 5.6% on the month to 5.628mn barrels daily.
By 13 May, Russian oil companies had reduced average daily production by 230kb/d from the October 2018 levels to 11.168kb/d, fully meeting their obligations under the OPEC+ agreement, Interfax reports. According to Kommersant, the drop in crude oil production might be explained by issues with the crude oil contamination at the Druzhba pipeline. The key contributor to the production cut in May was Surgutneftegas, which by 13 May had reduced output 13% from the end of April, while at other integrated oil companies crude production remained broadly flat, Kommersant reports. Surgutneftegas’ oil production dropped to 147.1kt/d by 12 May, Interfax writes.
Russia’s oil production fell to 11.23mn barrels per day (bpd) in April from 11.3mn bpd in March, but remained above levels targeted in a deal on output cuts by major producers, Energy Ministry data showed on May 2. In tonnes, oil output reached 45.975mn versus 47.783mn in March, which is a day longer. Reuters uses a tonnes/barrels ratio of 7.33. Russia has pledged to reduce its oil output by 228,000 bpd to around 11.18mn bpd from the roughly 11.41mn bpd it pumped in October 2018, the baseline for the supply agreement. Energy Minister Alexander Novak said on May 2 that Russian production in May would be in line with the agreed level. In a statement, he said Russia had cut its oil output by 213,000 barrels per day (bpd) in April on average from October 2018 levels, excluding production-sharing agreements (PSAs) with foreign companies. Including PSA projects, production was down by 197,000 bpd.
The exception was Gazprom Neft, which increased crude output 3.3% m/m. The highest production cuts were shown by Bashneft and Surgutneftegas, at 1.2% and 0.9% m/m, respectively. Lukoil, Rosneft and Tatneft reduced crude output 0.7% m/m, 0.4% m/m and 0.4% MoM, respectively. Non-integrated oil producers decreased crude production 1.7% M/m.
A dispute over how much contaminated oil is in Russia’s Druzhba oil pipeline are likely to stymie the restart of deliveries of crude via the pipeline to customers in the west. The country's state pipeline Transneft operator has disputed the quantity of contaminated oil that was supplied to Europe via Belarus. About 3mn tonnes of oil were contaminated with organic chloride, not the 5 million estimated by Belarus, the VP of the company Sergei Andronov told the Kommersant daily on May 30.
Russian gas production was up 3.9% y/y in April. Novatek’s consolidate production increased 14% y/y, driven by the ongoing ramp up at Yamal LNG. Lukoil, Rosneft and Surgutneftegas reduced gas output 3.4%, 3.1% and 0.9% y/y, respectively. Gazprom’s gas production was published at 44.2bcm in April, according to Interfax, implying a modest increase of 1.6% y/y.
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