A Review of the Nigerian Energy Industry

Russian output hits post-Soviet high

Prirazlomnoye in Murmansk04 November 2013, News Wires – A production ramp-up at Gazprom Neft and Surgutneftegas brought Russia’s oil output to a new post-Soviet high of 10.59 million barrels per day in October.

This was up 0.6% from 10.53 million bpd pumped in September. In tonnes, Russia’s crude production was 44.77 million last month.

That’s above 10 million bpd produced last month by Saudi Arabia, the world’s top oil exporter, Reuters reported. But, according to the International Energy Agency, the West’s energy watchdog, the US will next year overtake Russia as the world’s top oil producer thanks to hard-to-recover crude production boom.

Russia is aiming to produce at least 10 million bpd this decade and has introduced some tax relieves for the “tight oil” output, seen as the next source of oil output growth as deposits in West Siberia, the hinterland of the country’s crude production, are becoming increasingly depleted, Reuters reported.

Oil and gas production are a cornerstone of energy-dependent Russian economy and accounts for over a half of state’s budged revenues.

Total exports via Russia’s oil pipeline monopoly Transneft edged down 1% to 4.3 million bpd in October from September.

According to the central dispatching unit of the Energy Ministry, CDU TEK, oil production at Surgutneftegas, the country’s third-largest oil producer, rose by 3.5% last month, to 1.24 million bpd.

Crude output at Gazprom Neft, the oil arm of world’s top natural gas producer Gazprom, increased by 4.2% to more than 660,000 bpd, thanks to better results at its northern and West Siberia production units, including Noyabrskneftegas.

One of the Russia’s mid-sized producers, Russneft, has shown a 36% production decline, month-on-month. An official at CDU TEK said that some of its units, including Belkamneft, were moved to “other producers” category.

A spokesman for Russneft did not return phone calls from Reuters.

Mikhail Gutseriyev, the owner of Russneft, told the news agency last month that the company was going through a restructuring and debt refinancing with creditors with the aim of cutting interest payments on its debt, streamlining its corporate structure and cutting costs, and ultimately raising production.

Ranked 34th in Forbes magazine’s latest Russian rich list, Gutseriyev fled Russia in 2007 following accusations of tax fraud, but returned to the country in 2010.

Russia’s overall natural gas production jumped by 14% to 2.02 billion cubic metres a day in October.

Gazprom’s output rose by 15% to 1.49 Bcm per day, while gas production at Novatek, Russia’s top non-state gas producer, rose by 7% to almost 0.15 Bcm per day.

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