Russian oil, gas output continues rising despite setbacks

Russian oil and gas production climbed further in the first seven months of 2019, despite cutbacks relating to the dirty oil crisis and a recent dip in gas exports.

Crude oil and condensate output from January to July grew by 2% year on year to more than 325mn tonnes (11.2mn barrels per day), according to data published by the energy ministry’s CDU TEK department. Extraction was down 0.6% y/y in July, however, at 47.15mn tonnes.

Output had slumped 10.7% to 11.11mn bpd in May, as exports via the Druzhba pipeline were disrupted after it was found that millions of barrels of crude had been contaminated with organic chlorides. It then fell to a three-year low of 10.8mn bpd in early July, after national pipeline operator Transneft stopped receiving oil from state-owned producer Rosneft. The move was believed to be part of a larger dispute between the pair over efforts to resolve the contamination crisis.

Overall production for July came to 47.15mn tonnes (11.15mn bpd), according to CDU TEK, indicating that supply bounced back during the second half of the month. But this still marked a 0.6% decline on the amount produced in July last year.

Rosneft produced 112.8mn tonnes in the first seven months of 2019, while leading private oil companies Lukoil and Surgutneftegaz produced 47.9mn tonnes and 35.1mn tonnes respectively.

Meanwhile, Russian gas production increased 3% y/y from January to July at 431.9bn cubic metres, according to CDU TEK. The output for July alone was 54.66 bcm, up 0.5% y/y.

These gains came despite a 5.6% y/y slump in state-owned supplier Gazprom’s exports countries outside the former Soviet Union between January 1 and July 15, down to 102.8 bcm. The company’s output was unaffected by weaker European sales, rising 1.9% y/y to 294.5 bcm.

Russia’s top independent gas producer Novatek extracted 40.86 bcm of gas in the first seven months, while Rosneft produced 25.43 bcm, Lukoil 11.93 bcm and Surgutneftegaz 5.58 bcm.