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Due to the OPEC+ production cuts, Russia’s crude oil production in 2019 could be lower than originally planned—at 552 million tons, or 11.085 million bpd, Russia’s Energy Minister Alexander Novak said on Tuesday.
According to Novak, plans for next year were for Russia’s oil production to stand at 555 million tons-556 million tons, or 11.145 million bpd-11.165 million bpd, as per S&P Global Platts calculations based on a conversion rate of 7.33 barrels to one metric ton.
A lot will depend on Russia’s oil production policy after the first half of 2019, the Russian minister told reporters on Tuesday.
The new OPEC+ deal, under which Russia will be cutting 228,000 bpd, is for a six-month period with an option to review in April.
Russian oil companies will reduce their production by that amount during the first quarter of 2019, Novak said today, adding that he is scheduled to meet with representatives of Russia’s oil companies on Wednesday.
Last week, the minister said that Russia is planning to reduce its oil production by 50,000 bpd to 60,000 bpd in January as part of the new OPEC+ deal, and will not be cutting its 228,000-bpd share outright at the start of the agreement.
Russia has already drafted a timetable for how much oil production it would reduce each month until it reaches its share of the OPEC/non-OPEC production cut, Novak said, reaffirming Moscow’s position that its reduction would be gradual, just like in the previous agreement between OPEC and the Russia-led non-OPEC partners.
Russia will also be cutting crude oil exports and transit volumes in the first quarter next year compared to Q4 2018, according to a quarterly plan by the energy ministry seen by Reuters. According to Reuters calculations based on the export schedule, Russia’s January-March oil exports are set to drop by 1.1 percent compared to October-December.
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.