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9.0 Industry & Sectors 9.1 Sector news
9.1.1a Oil & gas sector results
Russian oil production reached post-Soviet high in 2019, despite the agreeing to the so-called OPEC+ production cuts, according to preliminary data from the Energy Ministry’s CDU-TEK unit. Russia produced 560.2mn tons of oil in 2019, up 0.8% from the previous year, or 11.25mn barrels a day. The only time Russia produced more was during the Soviet era, when domestic oil companies produced a record 11.416mn barrels a day in 1987, according to BP Plc. Russian oil production has growing for eleven consecutive years and even an agreement to cut 228,000 barrels a day from the October 2018 baseline of 11.418mn barrels a day, agreed with OPEC last year, was not enough to hold the growing production in check.
Russia’s total crude oil output in Russia rose 0.2% m/m to 11.2mnbbl/d in December, according to CDU TEK.
Among oil majors, Tatneft and Bashneft increased crude production 1.2% m/m and 0.6% m/m, respectively. Crude output at Lukoil and Surgutneftegaz was nearly flat m/m (+0.1% m/m and -0.1% m/m, respectively). Meanwhile, Gazprom Neft and R osneft decreased crude production 0.7% m/m and 0.3% m/m, respectively. Non-integrated producers increased crude production 1.0% m/m.
Russian gas production increased a slight 0.3% y/y to 2.2bcm/d in December.
Gazprom decreased its output 1.0% y/y, while Novatek's production increased 3.9% y/y. Surgutneftegas, Lukoil and Rosneft raised their gas output 3.1% y/y, 2.2% y/y and 0.3% y/y, respectively.
Analysts estimate that crude production in December was 1.4% below that in October 2018 (the reference point for the OPEC+ production cut deal), or 156kbbl/d.
Russia agreed with OPEC to gradually to reduce oil output 228kbbl/d from the October 2018 levels in 2019. Analysts calculate that full year 2019 crude production increased 0.8% y/y to 560mnt (a record in post-Soviet Union history) implying that average daily crude production in 2019 was 1.5%, or 168kbbl/d, below production in October 2018.
Production at Gazprom Neft continues to decline, falling for fifth month in a row (it was down 7.3% relative to the October 2018 level). Gazprom Neft and Bashneft also showed the greatest declines in production in 2019 (-0.9% y/y and -1.5% y/y, respectively), while Tatneft increased crude output 0.9% y/y (driven by growing production of high viscous oil).
Russian natural gas production was up only a marginal 0.3% y/y, pressured by lower production at Gazprom (-1.0% y/y), although Novatek was up 3.9% y/y.
74 RUSSIA Country Report February 2020 www.intellinews.com
