Rus­sian oil com­pa­nies to re­store its oil pro­duc­tion lev­els

Chemical Industry Digest - - News & Views -

Rus­sia has told its oil com­pa­nies that they can re­store crude oil pro­duc­tion to 2016 lev­els, the coun­try’s third largest pro­ducer, Gazprom Neft, said Tues­day in a brief­ing in Lon­don. Un­der an agree­ment with Opec and other pro­duc­ers, Rus­sia had com­mit­ted to cut­ting its pro­duc­tion by 300,000 bar­rels per day (Bpd) un­til De­cem­ber 2018. The over­all tar­get was to re­duce pro­duc­tion by 1.8 mil­lion bar­rels per day (Mmbpd), but given sup­ply dis­rup­tions in ma­jor pro­duc­ers such as Iran, Libya and Venezuela, Moscow and Riyadh have agreed to lift their out­put in or­der to bal­ance the sup­ply and de­mand.

Yakovlev said Gazprom Neft, pro­duc­ing 15% of the Rus­sian oil, has felt the hit of the pro­duc­tion cuts agreed to by the gov­ern­ment in late 2016. Pro­duc­ers in the coun­try were told to cut out­put in equal pro­por­tion, and Gazprom Neft shut in wells in Western Siberia and down­scaled in­vest­ment in drilling pro­grams to com­ply with the cuts, Kal­lan­ish En­ergy re­ports.

It’s not clear whether the Opec and non-Opec deal has been un­of­fi­cially scrapped, but both Rus­sia and Saudi Ara­bia have pub­licly said they would add 1 Mmbpd of sup­ply to the mar­kets.

The com­pany could add an­other 20,000 to 30,000 Bpd pro­duc­tion this year, and an­other 50,000 Bpd next year.

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