Page 8 - FSUOGM Week 03 2020
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FSUOGM PERFORMANCE FSUOGM
Russian oil output set for another post-Soviet high in 2020: OPEC
RUSSIA
Russia has secured an exemption for condensate in its OPEC+ quotas.
RUSSIAN oil and condensate production could rise to 11.48mn barrels per day in 2020, accord- ing to OPEC forecasts published on January 15, beating the post-Soviet record of 11.25mn bpd it set last year.
OPEC and other producers agreed in Decem- ber to deepen cuts in the first quarter of this year to prop up oil prices, with Moscow pledging to cap production at 11.12mn bpd – 300,000 bpd lower than an October 2018 baseline of 11.42mn bpd.
However, Russia has also said that the restric- tions will no longer apply to its condensate pro- duction, which fluctuates between 800,000 and 950,000 bpd, giving it room to ramp up supply further.
In its monthly market report, OPEC said it expected Russia to produce 11.27mn bpd in the first quarter, increasing to 11.5mn bpd in the sec- ond, 11.51mn bpd in the third and 11.64mn bpd in the fourth.
The Russian Energy Minister has meanwhile said it anticpates output in 2020 to total between 555 and 565mn tonnes, or 11.15-11.35mn bpd.
Russia, OPEC and other producers in the
so-called OPEC+ group have been co-operating on oil supply since 2016, although oil prices have stubbornly remained within the $60-65 price range. They are due to meet against in late March to discuss quotas for the remainder of the year.
While Russia has continued to expand pro- duction over the past few years, largely failing to comply with restrictions agreed by the group, its producers still want out. By capping output, they say, Russia is ceding market share to US shale companies and other producers not in OPEC+ countries.
President Vladimir Putin has so far resisted these calls, although Russian Energy Minister Alexander Novak hinted in December that Rus- sia might drop out of OPEC+ this year.
“As far as the production cuts are con- cerned, I repeat once again, this is not an indef- inite process. A decision on the exit should be gradually taken in order to keep up market share and so that our companies would be able to provide and implement their future pro- jects,” Novak said on Russian state television on December 27. “I think that we consider that this [coming] year.”
PROJECTS & COMPANIES
Rosneft ups stake in German refinery
RUSSIA
The Bayernoil refinery can process up to 210,000 barrel per day of oil.
RUSSIA’SRosnefthasraiseditsstakeintheBay- ernoil refinery in south-east Germany from 25% to 2.86%, after closing a deal to buy a share from BP.
Rosneft announced the purchase on January 17, stating that the move would help boost its fuel marketing operations in Germany’s indus- trial region of Bavaria and in neighbouring Aus- tria. It did not reveal how much it had paid for the stake.
“Increasing our share in the Bayernoil refin- ery is a logical step that will contribute to the fur- ther development of the company’s business on theEuropeanmarket,”RosneftCEOIgorSechin commented.
The Bayernoil refinery is capable of process- ing 210,000 barrels per day (bpd) of crude. Ros- neft’s partners at the venture are Vitol subsidiary Varo Energy (51.4%) and Italy’s Eni (20%).
Rosneft is already the third-biggest player in the German oil refining sector. It also owns a 54% stake in the 208,000 bpd Schwedt refinery in
north-easternGermanyanda24%interestinthe 301,000 bpd MiRO plant in the country’s south. Rosneft began trading products in Germany under its own brand name Rosneft Deutschland in early 2018, although it is yet to enter the coun-
try’s end-consumer market for fuel.
The company also mooted a plan two years
ago to build a spur leading from the southern branch of Druzhba, Russia’s main oil transport system in Europe, to the Bavernoil and MiRO plants. The refineries are currently supplied via the 753-km Transalpine pipeline that runs from the Italian port of Trieste. But Rosneft wants to servetherefinerieswithmoreofitsowncrude.
Rosneft has said it is continuing to review the plan to extend the Druzhba pipeline. But there is no evidence of any concrete progress being made since it first suggested the idea.
Rosneft is already a major oil supplier to Ger- many, typically delivering around 422,000 bpd each year, or around a quarter of the country’s total imports.
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