Rosneft leads Russian oil output to new high

2 January 2013
By Sofia Mitra-Thakur
Mobile version
Share |
An employee in uniform stands near a Rosneft petrol station in St Petersburg

An employee in uniform stands near a Rosneft petrol station in St Petersburg

More crude from state-owned top producer Rosneft kept Russian oil output the highest in the world last year, ahead of Saudi Arabia, Energy Ministry data showed.

Crude output edged up almost 1 per cent to a new post-Soviet high of 10.37 million barrels per day (bpd), but the increase could halt this year due to depleted oil fields in West Siberia.

Russia, whose proceeds from oil gas constitute around half of budget revenues, aims to keep its crude production at no less than 10 million bpd until 2020.

The Kremlin has increased its share in the oil industry to over 50 per cent after top oil producer Rosneft clinched an agreement to acquire Anglo-Russian TNK-BP for around $55bn in a cash-and-stock deal.

After the acquisition, expected to be completed in the first half of this year, Rosneft will become the world's largest listed oil producer with hydrocarbon output of some 4.6 million barrels of oil equivalent per day.

In tonnes, Russia's crude production was 518.018 million last year, the ministry said, up from 511.432 million tonnes in 2011, which was one day shorter than 2012.

In December, Russia's oil production edged down to 10.48 million bpd from 10.50 million in November, a post-Soviet high.

Rosneft reported one of the largest rises in crude output among the Russian oil majors last year, with an increase of 2.3 per cent to 117.473 million tonnes (2.4 million bpd) on a daily basis thanks to increased production at its East Siberia's Vankor field to 367,000 bpd.

LUKOIL, Russia's second-largest oil producer, saw a 1 per cent decline in domestic output, to 84.620 million tonnes.

LUKOIL has tried to increase its exposure to overseas oil deposits as it has been unable to offset a production decline at its mature West Siberian oilfields. It owns 75 per cent of Iraq's huge West Qurna-2 deposit.

Saudi Arabia has restrained its output to steady oil prices, which reached a record high last year. Brent crude averaged over $111 a barrel in 2012, the highest on record. 

The international benchmark gained 3.5 per cent for the year, after rising 13.3 per cent in 2011.

The windfall has helped oil production in Russia, where the extent of the crude output rise surprised many analysts. Moscow hopes the momentum will continue with so-called tight oil, hidden in layers of rock.

However, Russia has yet to follow the United States in deploying advanced horizontal drilling and hydraulic fracturing technologies, known as fracking, on a commercial scale.

Last month, Rosneft agreed with ExxonMobil to tap the shale oil in West Siberia.

The International Energy Agency (IEA) expects non-OPEC supplies to grow by 900,000 bpd to 54.17 million bpd in 2013, taking total consumption up to an average of 90.52 million bpd, while production in Russia will decline.

"We expect Russia's crude production to be lower by around 100,000 barrels per day in 2013 mainly because brownfield production declines should outpace greenfield supply growth," IEA's supply analyst Michael Cohen said.

Brownfield, or established, oil production in Russia accounts for over 80 per cent of total output. Vienna-based JBC energy consultancy expects Russian oil production to remain flat this year.

"We see Russian total oil output virtually unchanged this year as more widespread EOR (enhanced oil recovery) application and an increase in output in recently developed fields compensate for the declines in the mature fields," it said.

The far-flung deposits of East Siberia are viewed as vital in offsetting declining production in West Siberia. Last month, Russia completed an expansion of its Asian oil pipeline to the Pacific port of Kozmino, filled by crude from East Siberia.

Russia has been steadily increasing its crude exports to Asia at the expense of deliveries to Europe. 

It shipped 16.3 million tonnes to Kozmino this year, 1.1 million up compared to 2011.

Next year, exports via Kozmino will rise further, to around 21-22 million tonnes.

The ministry data also showed that Russia's total oil exports via oil pipeline monopoly Transneft and other routes edged down 0.3 per cent to 234.3 million tonnes last year.

The oil resources at Russia's offshore fields – estimated at 100 billion tonnes of oil equivalent – are also seen as the next source of domestic oil production. 

Most are in the Arctic where only state-owned companies, such as Rosneft, have access.

Daily gas production jumped 10.4 per cent, month-on-month, to 2.12 billion cubic metres (bcm) in December thanks to a rise in seasonal demand.

Production for 2012 declined to 1.79 bcm from 1.84 bcm in 2011 on a daily basis. 

Gas output from Gazprom, the world's leading producer, decreased in 2012 to 1.31 bcm a day from 1.4 bcm in 2011 as Europeans used cheaper alternatives such as liquefied natural gas (LNG) and spot market supplies.

Output at Russia's second-largest gas producer, Novatek, fell to 51 bcm from 53.3 bcm in 2011.

The ministry expected gas production to increase in 2013 to 1.87 bcm a day, or a total 683 bcm, although a 1.2 per cent lower than previously seen.

The data for 2012 gas exports was not yet available.

Latest Issue

E&T cover image 1607

"As the dust settles after the referendum result, we consider what happens next. We also look forward to an international summer of sport."

E&T jobs

  • Chair in Integrated Sensor Technology

    The University of Edinburgh
    • Edinburgh, City of Edinburgh

    The University of Edinburgh is one of the world’s top 20 institutions of higher education.....

    • Recruiter: The University of Edinburgh

    Apply for this job

  • Principal Electrical Engineer - Power

    BAE Systems
    • Bristol, England / Cumbria, Barrow-In-Furness, England
    • Negotiable

    Principal Electrical Engineer - Power Join our Electrical Power team and help design the self-contained generation and distribution system for the Successor submarine - a new generation of submarine designed to carry the UK's independent nuclear deterrent

    • Recruiter: BAE Systems

    Apply for this job

  • Operations Supervisor (Mechanical/Electrical/Instrumentation)

    National Grid
    • England, Cambridgeshire
    • £33000 - £39000 per annum

    Operations Supervisor - (Mechanical/Electrical/Instrumentation) Salary: Circa £33k - 39k dependant on experience + vehicle and great additional benefits (share scheme, pension, potential bonus).Location: Wisbech - Cambridgeshire We currently have an excit

    • Recruiter: National Grid

    Apply for this job

  • Lead NDT Trainer

    BAE Systems
    • England, Lancashire
    • Competitive package

    Would you like to be involved with training UK and international teams in Non Destructive Inspection (NDI) to support the in service fleet (Typhoon Tornado, and Hawk)?

    • Recruiter: BAE Systems

    Apply for this job

  • Systems Design - Emerging Portfolio

    MBDA
    • Bristol
    • Competitive Salary & Benefits

    What?s the opportunity?   There are fantastic opportunities in Systems Design for engineers to work within Future Systems. These are highly visible, fast paced roles, in...

    • Recruiter: MBDA

    Apply for this job

  • Metering Engineer

    Department for Business, Innovation and Skills
    • Teddington, United Kingdom
    • £24,109 - £27,961 plus EO Electronics PE of £8,090.00

    We are now looking for a Metering Engineer to deliver RD’s In-Service Testing (IST) scheme for gas and electricity meters.

    • Recruiter: Department for Business, Innovation and Skills

    Apply for this job

  • Head of Operational Estates

    Premium job

    The Shrewsbury and Telford Hospital NHS Trust
    • Shrewsbury, Shropshire
    • £46,625 to £57,640 per annum

    As an experienced Estates Manager, you will play a key role in helping to shape the future of the Estates service.

    • Recruiter: The Shrewsbury and Telford Hospital NHS Trust

    Apply for this job

  • Engineering Project Manager - Electrical & Automation

    Nestle
    • York, North Yorkshire
    • c£45,000 + Car Allowance + Bonus + Excellent Benefits

    Nestlé Product Technology Centre in York currently has an excellent opportunity for an Engineering Project Manager

    • Recruiter: Nestle

    Apply for this job

  • Assistant Professor (Tenure Track) of Smart Building Solutions

    Premium job

    ETH Zurich
    • Zurich, Canton of Zürich (CH)

    The successful candidate is expected to develop a strong and visible research programme in the area of control and diagnostics of building systems

    • Recruiter: ETH Zurich

    Apply for this job

  • Process Controls Leader

    Premium job

    Phillips 66
    • Humber Refinery, South Killingholme, North Lincolnshire DN40 3DW
    • £60k - 75k plus extensive Compensation and benefits package, dependent upon experience

    Experienced Process Control Leader providing leadership and technical support for Oil Refinery. Extensive Compensation and benefits package.

    • Recruiter: Phillips 66

    Apply for this job

More jobs ▶

Subscribe

Choose the way you would like to access the latest news and developments in your field.

Subscribe to E&T