Despite the fact that Russia pumped more than its quota under the OPEC/non-OPEC deal for two months in a row, Moscow is staying committed to the pact, Russian Energy Minister Alexander Novak said on Thursday.
Russia is “fully committed” to help the oil market to return to balance, said Novak, who also announced that Russia’s compliance to the OPEC/non-OPEC production cut pact was 95.2 percent last month. The reason for the lower compliance was higher production at fields under production sharing contracts (PSA), Novak said.
Russia’s oil production held onto an 11-month high in April, flat compared to March and above its quota under the OPEC/non-OPEC deal for a second consecutive month, data by Russia’s Energy Ministry showed on Wednesday.
Russia pumped a total of 10.97 million bpd of oil in April, unchanged from March. 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.
After three months of steady output, Russia’s crude oil production increased in March to 10.97 million bpd, the highest level since April 2017, as the top two Russian companies— Rosneft and Lukoil—boosted their production. In March, Russia’s compliance with the deal was at 93.4 percent, Novak said at the time, explaining the lower compliance with seasonality on the domestic market and reiterating that his country was committed to achieving the oil market rebalancing. Related: The Gulf State That Needs $113 Oil
Although Russia’s non-compliance in the past two months has been more than offset by slumping production at some OPEC members, the overproduction could become a feature within the OPEC/non-OPEC pact, according to Massachusetts-based energy consultancy ESAI Energy.
Rising spare capacity at the biggest Russian oil producer Rosneft and at Gazprom Neft—which has an ambitious production growth plan—could soon “lead to weakening Russian compliance,” ESAI Energy Principal Andrew Reed told Bloomberg in an email.
By Tsvetana Paraskova for Oilprice.com
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