Russia Oil Output Hits Post-Soviet High

SOURCE: http://www.rigzone.com/news/oil_gas/a/136587/Russia_Oil_Output_Hits_PostSoviet_High_Small_Firms_Help

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Russia Oil Output Hits Post-Soviet High, Small Firms Help

by  Reuters Vladimir Soldatkin

Friday, January 02, 2015

Russia’s 2014 oil output hit a post-Soviet record high average of 10.58 million barrels per day, rising by 0.7 percent helped by small non-state producers.

MOSCOW, Jan 2 (Reuters) – Russia’s 2014 oil output hit a post-Soviet record high average of 10.58 million barrels per day (bpd), rising by 0.7 percent helped by small non-state producers, Energy Ministry data showed on Friday.

Oil and gas condensate production in December hit 10.67 million bpd, also a record high since the collapse of the Soviet Union.

The data showed Russia’s so-called small producers, mostly privately held, increased their output by 11 percent to just over 1 million barrels per day.

Crude oil exports via state monopoly Transneft fell 5 percent to 195.5 million tonnes due to rising domestic demand and refinery runs.

Exports to China reached a new high of 22.6 million tonnes (452,000 bpd), up 43 percent on the year as Russia seeks to diversify its energy customers.

Russian producers capitalised on rising oil prices in the first half of 2014, when they reached over $113 per barrel. However, they have halved since then.

Hurt by falling oil prices and Western sanctions prompted by Moscow’s role in Ukraine, growth in oil output in 2014 slowed from a gain of 1.4 percent in 2013.

Top listed oil company Rosneft, which produces more oil than OPEC members Iraq or Iran, saw its output slip 0.7 percent as it struggled to arrest declining production at its West Siberian fields.

Oil and gas fund about half of Russia’s budget. The country’s economy is slipping into recession following a fall in oil prices and could see oil output decline to 525 million tonnes in 2015, according to an Energy Ministry forecast. The International Energy Agency (IEA) expects Russian oil output to fall by 1 percent.

The country’s natural gas production in 2014 fell by 4 percent to 640.237 billion cubic metres (bcm). Top producer Gazprom posted an output fall of 9 percent to an all-time low of 432 bcm due to its pricing dispute with Ukraine, once its second-largest customer after Germany.