The period of strong growth in Russian oil production is over and the country is likely to try to sustain its current production levels of 10.5 million barrels per day for the years to come.
Russia is pumping at near capacity with western Siberia still accounting for the bulk of Russia’s total crude output.
Russian oil and gas condensate output reversed a downward trend in June, rising 0.2% from May to 10.55 million barrels per day, thanks to privately owned firms LUKoil and Bashneft, Russian Energy Ministry data showed.
Chris Weafer, founding partner of Macro-Advisory, a Moscow-based business and investment consulting group,told New Europe that Russian oil output is still up year-on-year.
“There’s still growth in production, except the pace of growth has slowed down. So we are coming in to a period where we will see more stable production rather than continuously rising production. But there are new fields in East Siberia that are being developed,” Weafer said, mentioning LUKoil.
Russian oil production has been rising steadily for many years, Weafer said. “We now entered a period where we can see more stability,” he said. “Production might be volatile within maybe 100,000 to 200,000 barrels per day. But I don’t see any significant change either on the increase or on the decrease,” Weafer said, forecasting a stable production of about 10.4 million barrels a day for the next several years as some fields step up under early stage development which should be available to compensate for the brown fields around that time.
He reminded that Russian President Vladimir Putin has given a very specific order that Russia was to sustain at least 10 million barrels of oil per day for at least the next 10 years for economic reasons as well as geopolitical reasons. “So there is no incentive to ratchet up to 11 million barrels or something like that. But we don’t have any concerns about production falling towards 10 million or below that,” Weafer said. “But the period of strong growth that’s definitely over because all those fields are now in production,” he added.
Weafer also said that there would be enough oil from the fields in East Siberia for exports through theEastern Siberia–Pacific Ocean oil pipeline(ESPO ). He noted, however, that there might be some diversion of Russian oil flow from the west to the east. “Oil going east instead of into Novorossiysk because Kazakhstan is quite likely to want to pump some extra oil from the Kashagan field - whenever it finally starts - up to Novorossiysk. Obviously the Bosporus capacity is pretty much full.
He said that Russia may fulfill its commitments and strategy to send more oil to the East Pacific by taking oil out of Novorossiysk for that pipeline. “But then that capacity in Novorossiysk and then the Bosporus would likely be taken up by Kazakhstan and the Kashagan field,” Weafer said.
http://www.neurope.eu/article/putin-plans-10-million-barrel-daily-oil-dose