While the oil market is awaiting what Saudi Arabia and Russia—the leaders of the OPEC and non-OPEC producers part of the production cut deal—will decide on the future of the pact, Russia’s Energy Minister Alexander Novak was quoted as saying on Wednesday that Russia planned to increase its oil production next year, even if the global agreement is extended beyond March.
“We forecast that in 2018 we will have small growth relative to the year 2017, but it will to a large extent depend on what decisions are taken on extending or not extending the [deal] with OPEC nations,” Reuters quoted Novak as telling reporters today.
“We will now make our forecasts within a range of a possible increase from today’s level, if there is no [extended] deal [with OPEC],” he said.
Asked if Russia would stick to its plans for small growth next year even in case of the pact extension, Novak replied: “Yes.”
Last month, Russia’s crude oil production was flat at 10.91 million bpd compared to August—staying at the lowest levels for 2017, as maintenance at some fields affected production, according to data by the Russian Energy Ministry compiled by Reuters.
Russia’s August and September oil production level was the lowest since the 10.71 million bpd it produced in August 2016.
The daily oil production in September 2017 was down by 3 percent compared to the October 2016 levels, which OPEC and non-OPEC countries part of the production cut deal had used as the baseline for the reductions.
Non-OPEC Russia, like OPEC’s de facto leader Saudi Arabia and most of the other cartel members, entered the joint deal 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 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.
Russia’s pledge in the OPEC/non-OPEC deal is to shave off 300,000 bpd from the October 2016 level, which was the highest in almost 30 years.
By Tsvetana Paraskova for Oilprice.com
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