Russia’s crude oil production in January was basically flat compared to December 2017, after rising production at foreign firm-led projects compensated for small declines at the two major Russian oil producers, Rosneft and Lukoil.
According to data by Russia’s Energy Ministry, Russian oil production in January was 46.306 million tons, or 10.95 million bpd, just slightly less than 46.338 million tons in December 2017.
The January crude oil production is in line with Russia’s pledge in the OPEC/non-OPEC deal is to shave off 300,000 bpd from its October 2016 level, which was the country’s highest monthly production in almost 30 years—11.247 million bpd.
Russia’s cut in its January production was 301,200 bpd, as part of the pact between OPEC and the Russia-led alliance of non-OPEC nations, Energy Minister Alexander Novak says.
Crude oil production from Production Sharing Agreement (PSA) projects last month increased by more than 10 percent, while production at Rosneft and Lukoil fell by 0.2 percent and 0.5 percent, respectively, according to the energy ministry data quoted by Reuters.
The Sakhalin-1 project led by Exxon had plans to increase production in January to 250,000 bpd-260,000 bpd from 200,000 bpd last year and had a preliminary approval to do this. But Russian authorities have ordered the project to return in January to the previous--lower--production rate, industry sources told Reuters last week. The Sakhalin-1 project will continue to operate under the 200,000-bpd quota until Russian authorities finish the approval of a new plan for production, a source close to the Energy Ministry told Reuters. Related: The Oil Market Is Already Balanced
For the whole of 2017, Russia’s total average daily crude oil production inched up again, to a 30-year-high of 10.98 million bpd.
Non-OPEC Russia, like OPEC’s de facto leader Saudi Arabia and most of the other cartel members, entered the joint deal on January 1, 2017, at a very high level of production, which took much of the sting out of the cuts. In the last quarter of 2016, Russia’s production had hit a post-Soviet era high, while year over year in 2016, production grew to 10.96 million bpd, from 10.72 million bpd in 2015.
By Tsvetana Paraskova for Oilprice.com
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