Page 96 - RusRPTFeb19

Stream 2 AG, the pipeline construction operator, said on Sunday. "By now, about 370 kilometers have already been laid," the company said in a press release. The Pioneering Spirit pipe-lay vessel has joined the Nord Stream-2 flotilla in Finland’s exclusive economic zone. It will supersede the Solitaire vessel, which has been working in Finland since September. Now, the Solitaire will head to the southern part if Sweden’s exclusive economic zone to lay a 510-kilometer section of the pipeline. Both ships, the Pioneering Spirit, measuring 382 by 124 meters, with a multinational crew of 570, and the Solitaire, 300 by 41 meters, with a crew of 420, are operated by Allseas co.
OPEC+ decided to cut production by 1.2mmb/d from the average October 2018 level. Of this, Russia is to contribute 228kb/d. Although, in the short term, this is likely to reduce oil price volatility, it is going to affect Russian oils’ crude production plans for 2019, as all the integrated names were planning to keep oil output at least flat y/y (Lukoil) or to post growth (e.g. Tatneft or Gazprom Neft). We see Gazprom Neft and Tatneft being affected the most and having to revise their plans substantially. Coupled with the fact that crude oil is still trying to consolidate above $60/bbl and Russian oils are increasingly sensitive to oil prices, this might enhance the negative effect on their profitability in 2019, we think. Another 228kb/d cut. Russia agreed to contribute to the renewed production cut agreement last week, with a 228kb/d reduction from the average level in October 2018. This is to be introduced gradually, with 50- 60kb/d seen in January 2019, according to Minister of Energy Alexander Novak. Russian oil companies’ crude output is to be reduced proportionally, as per MinEnergo.
Russia has sufficient reserves to produce oil for 23–25 years, the Federal Mineral Resources Agency’s Director Yevgeny Kiselyov said in an interview with NTV television channel on Monday. “We have enough oil reserves to ensure the current production level during the next 23–25 years. At the same time, we will provide simple replacement of the reserves every year. That is why the finishing point is constantly postponed and is in line with the global sufficiency standards and even surpasses them,” he said. In November, Kiselyov said that his agency expected oil reserves excluding gas condensate to rise by 520–530mn tonnes in 2018.
Gas production in Russia in 2018 will exceed 700 billion cubic meters in 2018, Alexander Gladkov, head of the department of oil and gas production and transportation at the Ministry of Energy, reported at the Gas Forum of Russia. “A record gas production will be set - more than 700bn cubic meters,” said Gladkov. LNG production will reach almost 20mn tons, he added. In 2017, 691.1bn cubic meters were produced in Russia of gas. Thus, based on the data of the Ministry of Energy, this year production growth may exceed 1.3%.
Russia will invest more than $5bn in the Venezuelan oil industry, more than $1bn in the production of the extractive industry, and also supply 600,000 tons of grain to the country, President Nicolas Maduro said after talks with his Russian counterpart Vladimir Putin.
Russia is ready to invest around $1.4 bln in infrastructure development in Serbia to continue the TurkStream project through this country, Russian President Vladimir Putin said on Thursday answering a question from TASS at a joint press conference with Serbian President Aleksandar Vucic.
● Gazprom
96 RUSSIA Country Report February 2019 www.intellinews.com