By January 9, 2017 Read More →

Russian oil output cut by 100,000 b/d in early Jan

Russian oil output

Despite sticking to the agreement with OPEC to cut Russian oil output early in 2017, analysts expect Russian oil production to grow in the coming year as new fields come online. Bashneft photo.

Russian oil output down to 11.1 million b/d

By Olesya Astakhova

MOSCOW, Jan 9 (Reuters) – Russian oil output was cut in early January by around 100,000 barrels per day (b/d) from the previous month after an agreement with OPEC to cap global crude output, two sources from the energy sector told Reuters on Monday.

Russia’s oil and gas condensate output averaged 11.1 million barrels per day (b/d) in the period from Jan. 1 to Jan. 8, according to the two sources. This was down from 11.21 million b/d in December and October’s level of 11.247 million b/d, a starting point for output reduction agreed with the Organization of the Petroleum Exporting Countries.

The sources declined to give the reason for the fall or name the companies that reduced their production. The cuts came amid a cold spell in Russia and in its oil production heartland of Western Siberia in particular, where temperatures reached as low as minus 60 Celsius (minus 76 Fahrenheit).

Russian Energy Minister Alexander Novak had said the targeted level of Russian output was 10.947 million b/d after the production cut deal. He also said that Russia plans to reduce oil output by 200,000 b/d in the first quarter and reach the cuts of 300,000 b/d thereafter, as agreed with OPEC last month.

Some other countries, including Saudi Arabia, the world’s top oil exporter and biggest OPEC producer, have also reduced their output.

Saudi Arabia cut oil output in January by at least 486,000 b/d to 10.058 million b/d, fully implementing OPEC’s agreement to reduce output, according to a Gulf source familiar with Saudi oil policy.

Many analysts still expect Russian oil production to grow in 2017 overall and reach a record high due to new fields coming on line.

“We expect Russian crude and condensate output to decline only gradually from the remarkable Sep-Dec 2016 production levels, and to reach the announced 300,000 b/d output cut at the end of H1 2017,” Vienna-based JBC Energy said in a note last week.

“Year-on-year, however, we still see Russian crude production rising 170,000 b/d to average 11.14 million b/d in 2017.”

(Writing by Andrey Ostroukh and Vladimir Soldatkin, editing by Louise Heavens)


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