Gazprom Neft, an oil producing unit ofRussian gas monopoly Gazprom, postponed several business projects abroad as a result of low oil prices and a limitation ofavailable financing forthe oil company, First Deputy CEO Vadim Yakovlev said.
“We have limited options ofdevelopment abroad. We optimised the investment portfolio, postponed a number ofprojects, carried outadditional work toreduce prices,” Yakovlev told reporters on March 2.
There are no details intowhat projects were canceled or postponed.
However, Gazprom Neft plans to ship off the first tanker from the Badra field in Iraq in April, Yakovlev said, adding that the tanker’s capacity will total 500,000 barrels. Yakovlev said that currently 15-17,000 barrels of oil is being produced at the field. Gazprom Neft and the Iraqi government continue talks on correcting timeline for shipment and volume of cost oil, he added.
See also: Oil Slump, Weak Ruble, Ukraine, Make Gazprom Reassess Plans
Alexei Kokin, a senior oil and gas analyst at UralSib Financial Corp, told New Europeon April 3 that the most interesting part for Gazprom Neft abroad is Iraq. “The rest is exploratory, high-risk; the sort of thing that every company tries to have a hand on but it does not mean that they’re serious about other things,” he said.
Gazprom Neft is the fourth largest oil producer inRussia, which is currently facing an economic decline overlow oil prices and sanctions imposed onMoscow bywestern countries overits role in the Ukrainian conflict.
However, Yakovlev noted that Gazprom Neft expects to ramp up hydrocarbon production this year, thanks to new projects and unconventional oil.
Gazprom Neft has been among the most active companies tapping tight oil in Russia.
In 2014, Gazprom Neft’s hydrocarbon output rose by 6.4% to 66.3 million tonnes of oil equivalent thanks to the launch of output at Prirazlomnoye, Russia’s first offshore Arctic production outlet, and new projects such as Arcticgaz. Last year, it produced 3.2 million tonnes of hard-to-recover crude and plans to ramp up output this year.
Russian oil production hits new post-Soviet high
Russian oil production hit the latest in a line of post-Soviet highs in March.
Gazprom and Rosneft brought Russia’s oil output to a post-Soviet era record of 10.71 million barrels per day in March, Energy Ministry data showed on April 2. That topped December’s high of 10.67 million barrels per day.
Kokin told New Europe that there are two reasons that oil production in Russia remains high despite the oil price slump.
“Firstly, there is no flexibility. Russian companies don’t like to change plans because it’s expensive to shut down wells and expensive to bring them back into operation,” he said, adding that Russian oil producers would rather wait out and possibly even incur sort-term losses rather than cutting down on production.
“Secondly, we are still kind of reaping the fruits of CapEx (capital expenditure) that were made some time ago,” Kokin said, predicting a slight decline in Russian oil production if the oil price remains between $50-$60 for the rest of the year. “Then, we will probably see a decline towards the end of the year,” the UralSib analyst forecasted.
http://www.neurope.eu/article/falling-oil-prices-sanctions-rein-gazprom-neft-plans