A general view of the Achinsk oil refining factory owned by Rosneft. The data showed that oil output in Russia was supported by increases at Rosneft and small producers.
Reuters
Russia, the world’s top oil producer, kept its monthly oil production stable in October, according to energy ministry data, regardless of western sanctions and weak oil prices.
Russia pumped an average 10.6mn barrels per day (bpd) last month, producing a monthly total of 44.838mn tonnes, which includes gas condensates, the data published on Sunday showed.
The figure was little changed from September’s 10.61mn bpd and a touch under the post-Soviet record high of 10.63mn bpd reached in December. It compares with Saudi Arabia’s October output of 9.65 mn bpd, according to a Reuters survey.
Western sanctions have targeted Russian individuals, banks and a wide range of companies, including in the energy sector, and limited their access to funding and advanced technology from Europe and the US.
The measures have mostly affected future Russian oil production in areas such as the Arctic, deep water and shale. But some Russian companies have already warned they would make spending cuts.
The Energy Ministry’s data showed that oil output in Russia, which produces around 80% of its oil from mature western Siberian deposits, was supported by increases at Rosneft , small producers and Bashneft.
Lukoil, Russia’s second-biggest oil producer, warned last month Russia was under risk to lose 25mn to 70mn tonnes in production by 2017 due to underinvestment and a lower number of wells being drilled. A falling oil price has further discouraged investment. The benchmark Brent price has fallen around a quarter from its year-highs in June to under $86 per barrel on Friday, which is below the level set in Russia’s budget.
Russian companies and officials expect the price to return to $95-$110 in the medium-to-longer term.
Bashneft, Russia’s sixth-largest oil producer, has been the country’s fastest-growing oil firm by output. Last year, it grew by more than 4%, extracting over 16mn tonnes of oil (320,000 bpd). Bashneft pumped an average 376,000 bpd last month, up 1.5% month-on-month, the data showed yesterday.
This week, a Moscow court ruled in favour of a seizure of Bashneft shares from Sistema, a conglomerate owned by abnaire businessman Vladimir Yetuvshenkov, citing “improper privatisation” in 2009.
Alexander Korsik, Bashneft’s chief executive, said on the day of the court ruling that its output could reach around 19mn tonnes in 2015 “if all goes as the company plans”.
Sistema has said it is considering an appeal. Russia’s daily gas output rose to 1.71bn cubic metres (bcm) in October, up from 1.52 bcm per day in September. Output at Gazprom, the world’s biggest gas producer, rose 16% to 1.13 bcm/day from September due to an increase in demand as temperatures fall.
Russia, Ukraine and the European Union reached a gas deal this week after Moscow cut off supplies to Kiev in June. Russia could resume natural gas deliveries to Ukraine as soon as next week once Kiev pays $2.2bn in debt and pre-payments.
Virgin Money may resume its IPO this week
Virgin Money Holdings (UK), the lender backed by billionaire Richard Branson, may resume its initial public offering this week, according to a report by Bloomberg. The potential to revive the offering comes after the Bank of England announced a lower-than-expected minimum regulatory ratio that prompted a surge in shares of UK lenders, said one of the people, who asked not to be identified because the details are private.
The UK mortgage and savings bank, which bought nationalized Northern Rock in 2011, delayed its IPO October 17 after a selloff in shares disrupted its plan. Aldermore Group, another British lender seeking a stock offering, postponed its deal earlier in the same week.
