Russia's crude production nears the Soviet peak of 11.4 million bpd in 1988 as the country races against the United States and Opec to become the world’s biggest oil supplier.
Russia in oil sector race as output hits a record
Russia has increased its oil output to a post-Soviet high, drawing further attention to the race to become the world’s biggest oil supplier.
The United States this month was forecast to overtake Russia and Saudi Arabia to become the world’s top oil and natural gas producer with 25 million barrels a day (bpd), according to the American Energy Information Administration. Russia was on track to produce 22 million bpd.
The Russian oil firms Gazprom Neft and Surgutneftegaz led Russia’s output increase to 10.59m bpd, according to Russia’s energy ministry yesterday. Russian oil output hit an all-time high of 11.41 million bpd in 1988 during the Soviet era.
Russia aims to triple oil exports to China, the world’s top oil consumer, in the coming decade. Initial agreements have already been signed to increase Russian-Sino oil shipments to 700,000 bpd from 300,000 bpd currently.
Abu Dhabi is investing US$40 billion over the next five years to increase production capacity to 3.5 million bpd from about 3 million bpd presently.
Although officials have said they plan to have spare capacity, the entire output could be easily absorbed by the world market, according to the International Energy Agency.
Russia aims to produce at least 10 million bpd this decade and has introduced some tax reliefs for the “tight oil” output, seen as the next source of crude oil output growth as deposits in West Siberia, the hinterland of the country’s crude production, are becoming increasingly depleted.
Oil and gas production is a cornerstone of Russia’s energy-dependent economy and accounts for more than half of the country’s budget revenues.
Total exports via Russia’s oil pipeline monopoly Transneft slid 1 per cent last month to 4.3 million bpd from September.
According to the central dispatching unit of the energy ministry, oil production at Surgutneftegas, the country’s third-largest oil producer, rose 3.5 per cent last month, to 1.24 million bpd.
Crude output at Gazprom Neft, the oil arm of the world’s top natural gas producer Gazprom, grew 4.2 per cent to exceed 660,000 bpd, thanks to better results at its northern and West Siberia production units, including Noyabrskneftegas.
Russneft, a mid-sized Russian oil refiner, reported a 36 per cent month-on-month output decline last month. Russia’s overall natural gas production increased 14 per cent to 2.02 billion cubic metres a day last month.
* with Reuters