Page 95 - RusRPTFeb19

9.0 Industry & Sectors 9.1 Sector news
9.1.1 Oil & gas sector news
Russian oil production rose to a post-Soviet record high of 11.16mn barrels per day (bpd) in 2018 on an annual average basis, data from its energy ministry showed on January 2. This is 1.6% more than a year earlier, but still 0.256 million b / d less than in 1987, when, according to BP, Soviet Russia set a historical record of 11.416 million b / d.
Total Russian crude output rose 0.7% MoM in December, after being 0.4% MoM down in November. Rosneft and Bashneft were the only integrated oil companies that decreased crude production (-0.5% MoM and -0.4% MoM, respectively). Tatneft showed the highest production growth, at 2.7% MoM, in December. Surgutneftegas, Gazprom Neft and Lukoil increased crude output 1.3% MoM, 1.3% MoM and 1.2% MoM, respectively. Non-integrated oil producers also grew crude production by 0.7% MoM in December.
Russian gas production was up 5.6% YoY in December. Novatek’s consolidated gas production increased 22.1% YoY, driven by ramping up production of Yamal LNG production. Lukoil, Rosneft and Surgutneftegas reduced gas production 1.8% YoY, 4.1% YoY and 5.0% YoY, respectively.
Russia plans to reduce oil production in three to four months time in the framework of the OPEC+ non-member deal as agreed last year, Deputy Energy Minister Pavel Sorokin said during a business mission to Saudi Arabia late on January 16. “Like (Energy Minister) Alexander Novak said at a meeting in Vienna in December, we will reach the target figure by April, in April. A normal technical process is going on, it is winter season yet, which means that the figures are somewhat fluctuating ... January is not over, we are on the way to reaching the figures stated by Novak in December,” Sorokin said. In December, Novak said that Russia will cut the production by 228,000 barrels per day in three months. In January, Saudi Arabia’s Energy Minister Khalid Al- Falih told CNBC that Russia is reducing the production slower than needed. In November 2016, OPEC and non-OPEC states including Russia agreed to reduce their oil output to rebalance the market, then raised the production quotas. In December 2018, the participants of the deal decided to cut production again by 800,000 barrels per day for OPEC and 400,000 barrels per day for non-OPEC states, including 228,000 barrels per day for Russia, from the level of October 2018.
Representatives of Russia’s state-owned gas giant Gazprom skipped a meeting to discuss gas transit through Ukraine in 2020, after the current contract expires. They did not sign up for trilateral technical consultations scheduled for January 15 to discuss a future deal on Russian natural gas transit though Ukraine, the Ukrainian side reported the same day.
The current contract specifying conditions for gas transit from Russian fields to its European Union (EU) customers via Ukraine’s pipeline system are due to expire at the end of 2019.
The implementation of the Nord Stream-2 project proceeds as scheduled, with about 370 kilometers of the pipeline have already been laid, Nord
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