Rosneft slashes crude oil output

Eyes boost again

MOSCOW, May 23, (RTRS): Russia’s Rosneft is ready to resume full oil output quickly once OPEC-led cuts end as the country’s top producer has focused its own cuts on newer fields, its chief executive has said.

Those cuts run until June 30, though oil ministers from OPEC and non-OPEC countries meeting in Vienna this week are expected to agree to extend a deal that has seen 22 countries reduce global output by 1.8 million barrels per day (bpd) since January 1.

“Restrictions (under the OPEC deal) are mainly applied to greenfields,” Rosneft Chief Executive Igor Sechin told reporters last week, referring to newer oil fields.

“We will maintain mature fields as they are and won’t cut production there,” he said. “Our priority will be maintaining mature fields.”

Mature fields require the pumping of gas or liquid to increase crude flows and once that is halted, it takes time to restore the pressure. That is less of an issue at new fields, where the flow rate is usually higher.

Rosneft, the world’s top listed oil company by output, accounts for around 40 percent of Russia’s crude production.

It has targeted its cuts at its Tagul, Suzun and Vankor fields in the so-called Vankor cluster which is relatively new, among other sites, according to a source familiar with the matter who did not want to be identified.

The cuts did not touch mature units such as Yuganskneftegaz, Rosneft’s largest, the source said.

A company quarterly report in May showed that production fell at nearly all of Rosneft’s fields, both mature and newer, compared to the fourth quarter of 2016.

However, the source said that in the case of mature fields such as Yugansk, production was affected by unusually cold weather, not deliberate steps to lower output.

“As part of the (OPEC and nonOPEC) deal, Rosneft has cut its production at new projects, while the company’s strategy is aimed at development of mature fields,” Rosneft said in emailed comments to Reuters.