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FSUOGM: Russia slashes fossil fuel forecasts

Russia has slashed its forecasts for oil, gas and coal production in 2021 and 2022, taking into account the pandemic’s impact, OPEC+ quotas and lower commodity prices.

The government now projects that oil output will reach 517mn tonnes (10.4mn barrels per day), versus a previous projection of 11.25mn bpd. The earlier forecast was made before Russia committed to unprecedented production cuts with its OPEC+ allies, in attempt to rebalance markets following the demand destruction caused by the pandemic.

The prediction for output in 2022 has also been lowered to 548mn tonnes (11mn bpd), compared with 11.2mn bpd previously. But the forecast for production in 2023 has not changed from 11.17mn bpd, while that for 2024 has been increased slightly to 11.17mn bpd from 11.15mn bpd.

Russia has also reduced its forecast for gas extraction this year to 698.3bn cubic metres from 750.1 bcm. The country’s biggest gas company Gazprom suffered a slump in output last year owing to weaker demand in Europe, as a result of the pandemic and a range of other factors, including greater competition from LNG supplies. The gas forecast for 2022 has been lowered to 743.1 bcm from 758.1 bcm, while the predictions for 2023 and 2024 remain unchanged at 773.1 bcm and 795.1 bcm respectively.

In Kazakhstan, the North Caspian Operating Co. (NCOC) developing the country’s giant offshore Kashagan gas field has said they will need to dredge navigational channels following a drop in Caspian water levels. The project, already approved by Kazakh authorities, has prompted some environmental concerns about the impact on the seabed and marine life.

Water levels in the Caspian have been falling for over two decades. In a statement on April 7, NCOC said this had limited the use of sea vessels at the Kashagan oilfield.

“It is posing a threat towards the safe operation of offshore production facilities that may lead to the complete shutdown of one of the largest fields in Kazakhstan,” NCOC said. The marine access channels are “the only feasible one of all short-term alternatives considered. Its implementation will ensure safe evacuation of personnel in the event of emergencies, continuous operation of the offshore facilities and offshore preventive maintenance in 2022,” it said.

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