Russia can raise its oil production by 200,000 bpd to 300,000 bpd in the short term, with a potential for up to a total increase of 500,000 bpd, Russian Energy Minister Alexander Novak told news channel Rossiya 24 on Tuesday.
The Russian companies will be reassessing their investment and production plans after they are no longer obliged to stick to the OPEC+ deal, Novak said.
Just before the OPEC+ meeting last week—which turned into a fiasco for OPEC’s leader Saudi Arabia after Russia refused to back additional massive production cuts—Russia’s average oil production had increased to 11.29 million bpd in February, up by 3.2 percent on the year and slightly up from 11.28 million bpd in January.
Russia’s oil production figures, however, include gas condensate, which, as of this year, is not included in the Russian production and quota as part of the OPEC+ production cut agreement.
The end of the OPEC+ deal will now allow Russian oil companies, which had not been happy with production restrictions, to boost output as soon as the current deal expires on April 1.
The largest Russian oil producer and most vocal critic of the OPEC+ agreement, Rosneft, already plans to increase its oil production, a source close to the company told Bloomberg on Monday.
According to the source, Rosneft could be able to increase its production by 300,000 bpd within two weeks.
After the OPEC+ break-up and after the price war that Saudi Arabia and Russia started, Rosneft slammed the deal in comments to Russian media, saying that it was only giving U.S. shale a bigger slice of the market.
The OPEC+ agreement was meaningless from Russia’s point of view, Rosneft’s spokesman Mikhail Leontyev told Russian outlet RBC on Sunday.
“By ceding ground in our markets, we removed cheaper Arab and Russian oil from the market only to clear the field for more expensive U.S. shale production and to help its production efficiency,” Leontyev said.
By Tsvetana Paraskova for Oilprice.com
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