Russian oil producer Russneft (not to be confused with Rosneft) plans to raise its oil production this year by at least 2.5 percent compared to last year’s 7 million tons - which were equal to 140,171 bpd - should the oil market rebalance, the privately-owned Russian company said on Monday.
In 2017, Russneft’s target output level will not drop below the 2016 production of 7 million tons of crude, and if balance of supply and demand on the global oil market is restored, the company will raise its output by at least 2.5 percent on an annual basis, it said.
The company will boost its 2017 investments 1.5 times, to US$442.5 million (25.7 billion rubles), from US$294.4 million (17.1 billion rubles) invested in 2016, Russneft said in its production and investment update today. The company will pursue production growth by raising the number of new wells by 21 percent on the year, to 128 wells from 106 wells drilled in 2016.
Russneft is also optimizing its operations to increase oil production “after lifting the limitations related to the agreements with OPEC countries to cut oil output,” the company said.
Leading the non-OPEC producers that are part of the supply-cut deal, Russia has pledged a 300,000-bpd gradual output reduction by the end of the first half of 2017.
Related: Who Will Win The Race In Russia’s Emerging Oil Frontier?
According to Platts, Russneft’s output in January 2017 rose 4 percent to 142,462 bpd compared to January last year, but dropped by 1.1 percent compared to October 2016, the baseline production level that most of the OPEC/non-OPEC signatories to the deal are using.
In November last year, the Gutseriev family, owners of 75 percent in Russneft said they were selling 20 percent of their holding in the company. After floating 20 percent of the shares on the Moscow stock exchange later in November, the Gutseriyev family now hold 55 percent and Glencore owns a 25-percent stake in the company.
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.