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Russia’s crude oil production hits record But analyst says it’s a temporary bump after eight stagnant months; oil output in first half the year lower than expected Petroleum News
According to a July 4 Dow Jones Newswire report out of Moscow, Russia’s crude oil production hit a new post-Soviet high of 9.43 million barrels a day in June – an event that followed eight months of stagnation.
The story followed a monthly statistical report released the same day from Russian officials.
But the monthly spurt doesn’t prove the trend of slowing oil output growth is reversing, an analyst told the news agency.
Oil production increased by almost 100,000 barrels per day from May, compared with the previous record of 9.41 set in September, but most of the increase is seasonal, analysts say. Oil from Siberia fields is “easier to extract in the summer and export ports are usually free from storms,” the story said.
“There’s nothing to celebrate at this point,” said Valery Nesterov, an analyst at the Moscow-based Troika Dialog brokerage. Troika Dialog recently downgraded its growth forecast to 2.8 percent, Dow Jones Newswires reported.
In the first half of the year, Russia oil production averaged 9.33 million bpd compared to the Russian government’s projection of 9.65 million bpd for 2005. Most new oil from PSA projects The bulk of the jump in June production came from projects being developed under production sharing agreements with foreign partners, including Royal Dutch/Shell-led Sakhalin-1, which began its seventh oil-producing season in early June, the news agency reported.
PSAs ensure a stable fiscal regime and tax rate for oil and gas projects but have also been severely criticized by many Russian politicians who claim the special terms PSAs offer are detrimental to government coffers.
According to the news agency report, TNK-BP posted a slight increase in June, plus its production was up 8.4 percent in the first six months of 2005, which is the biggest increase among Russia’s oil majors with the exception of state oil company OAO Rosneft.
Rosneft’s output was up due to production from the Yuganskneftegaz unit, which Yukos lost at a state auction to help cover its debts in December.
According to the Dow Jones Newswires report, Yuganskneftegaz posted a slight on-month increase in June as its production stabilized at slightly over 1 million bpd.
In late June Rosneft lowered its oil production forecast for Yuganskneftegaz, a sign that the company won’t be able to remedy production problems springing from Yukos’s underinvestment as fast as originally expected, the news agency reported.
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