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Russia’s largest oil producer Rosneft has the capacity to increase its crude oil production by the end of 2018 and will have additional capacity available in 2019, chief executive Igor Sechin said on Thursday.
Speaking on the sidelines of an economic forum in Italy, Sechin told S&P Global Platts “of course”, when asked if the Russian oil major could produce more oil in the last months of 2018.
As the biggest Russian oil producer, Rosneft was responsible for a large part of Russia’s production cut of 300,000 bpd under the deal with OPEC to withhold supply to boost prices.
OPEC and the Russia-led non-OPEC parties to the production cut deal—that has been in place since January 2017—agreed in June to reverse some of the cuts and relax compliance to offset falling supply from Iran and Venezuela.
Russia has already reversed the entire 300,000 bpd cut and additionally boosted production last month.
According to Platts estimates, Rosneft raised its oil production to 4.444 million bpd in September from 4.261 million bpd in May, a rise of 183,000 bpd since the June agreement.
In September, Russia’s total oil production reached 11.36 million bpd—a record high for the post-Soviet era.
Although Russia hit a post-Soviet record in its oil production last month, it doesn’t plan to raise output to 12 million bpd by the end of 2018, or in the near term, because this wouldn’t fit Moscow’s economic development plans, Energy Minister Alexander Novak said earlier this week.
This month, Russia’s oil production is around 150,000 bpd higher than its October 2016 level—the baseline for the OPEC+ production cut deal, Novak told TASS news agency on Tuesday. Currently, Russia is pumping 150,000 bpd above the October 2016 level, so in total, the country has increased production by 450,000 bpd since May, Novak said.
Russia can bring “a couple of hundred thousand barrels” in the short term, by December this year, the minister told Bloomberg in an interview at the end of September.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.