Page 84 - RusRPTJul19

production was almost flat m/m (-0.1% m/m). Lukoil, Gazprom Neft and Tatneft increased output 0.7% m/m, 4.6% m/m and 2.4% m/m, respectively. Non- integrated oil producers crude production was down 1.2% MoM.
Russian gas production was up 8.9% y/y in May, helped by the 9% y/y output growth at Gazprom to 43.6bcm, Interfax reports. Lukoil and Surgutneftegas reduced gas production 1.4% y/y and 1.5% y/y, respectively, while Rosneft’s gas output was down 0.3% y/y. Novatek’s standalone gas output (including Yamal LNG) increased 3.1% MoM.
Gazprom’s gas exports remain flat y/y since May, but have fallen 6.3% y/y YTD. Gazprom’s gas export were down 6.3% y/y to 87.8bcm in the period 1 January – 15 June, Kommersant reports. However, since the beginning of May gas export volumes have been almost flat y/y, at 23.4bcm, the paper writes. The strong export gas supplies to Europe over the last couple of months are generally driven by low gas prices (the price at the key European hub TTF is only $132/kcm, 49% lower than a year ago), which prompts coal substitution in power generation, and the ongoing filling of underground gas storages (they are now 67.1% full, or 15.5pp above the five-year average).
Russia’s average daily oil output in May fell below its OPEC+ target for the first time this year after buyers refused to take exports via Druzhba, the nation’s key pipeline to Europe, because of contamination. The country produced just more than 47mn tons of crude oil and condensate in May, according to preliminary data from the Energy Ministry’s CDU-TEK unit. That implies a daily average of about 11.114mn barrels, which is 76,000 barrels a day below the cap for the nation set under the OPEC+ deal, Bloomberg calculations show. May was the first full month of compliance by Russia this year, just weeks before the country meets with members of the Organization of Petroleum Exporting Countries to determine whether the cuts should be extended. Russia pledged to reduce its oil production under the deal by 228,000 barrels a day from the October baseline of about 11.418mn barrels a day.
Russian oil pipeline monopoly Transneft expects operations at the troubled Druzhba pipeline to return to normal and run at full capacity in 2-3 months, the VP of the company Roman Sharipov said on June 11 as cited by Tass. As reported in May, the transit of Russian oil via Druzhba pipeline has not yet been resumed due to persisting technical problems in Poland and Germany, and the uncertainty over the mechanisms of compensation for botched supplied of crude to European refineries.
Russia plans to increase output of liquefied natural gas (LNG) fivefold by 2035 to 120mn tonnes a year, Energy Minister Alexander Novak told the Nikkei newspaper on June 14, as cited by Tass. "We plan to increase LNG output to 120-140mn tonnes by 2035," Novak said. Nikkei said that Russia's LNG output currently stands at around 28mn tons. Russia also plans to increase its share on the global LNG market to 20%, Novak said. "We have the potential for that, including necessary resources and competiveness," he noted. "Russia has 74 trillion cubic meters of natural gas in the Arctic, and there are also many unexplored deposits," the energy minister added. Novak said that Russia plans to sell up to 70% of LNG to countries in the Asia-Pacific.
Russian gas major Gazprom sees no risks of losing market share in Europe to LNG (liquefied natural gas) supplies from the US, the deputy
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