Russia's 2013 oil output hits post-Soviet high

Russian LUKOIL ice-resistant fixed platform LSP-1 at Korchagin's oil field World energy power Russia said on Thursday that its oil output hit a post-Soviet high in 2013 while natural gas production at its vast Gazprom holding slipped for the second straight year. The mixed figures -- highlighted by yet another dip in oil exports outside ex-Soviet territories -- point to lingering problems in a sector that accounts for about half of Russia's budget revenues.
It also remains instrumental to President Vladimir Putin as he battles a rapid economic slowdown that has put a strain on the commitment to broader social spending he made when re-elected to a third term in 2012.
The Russian energy ministry's reporting unit said oil and gas condensate production grew by 1.0 percent last year to reach a new record of 523.3 million tonnes (10.51 million barrels per day).
Analysts and Russian media reports attributed the jump to soaring output by state-owned Rosneft -- the world's largest publicly traded oil firm -- at the mammoth Vankor field it launched in Siberia in 2009.
Gazprom is also ramping up production of gas condensate as its seeks to diversify away from its traditional but stalling pipeline supplies of blue fuel to Europe.
Russia had established its previous oil output high in 2012 when it reached 10.40 million barrels per day.
Its post-Soviet low came in 1994 when daily output slumped to 6.0 million barrels -- less than half of the 12.4 million barrels Russia and 14 other republics produced as part of the Soviet Union in 1988.
Russian output exceeds Saudi production
The current rate outpaces Saudi Arabian output and clinches for Russia the title of the world's biggest oil producer.
But Russia lacks the quick ability of Saudi Arabia to boost output in case of a strong global economic rebound or more serious turmoil in the Middle East.
It also appears to be unable to break through any further on large foreign markets to which it has no direct pipeline and that in some cases are starting to depend on US shale oil.
Thursday's figures showed Russia's exports outside the former Soviet nations declining by 2.2 percent.
Russia's overall natural gas production rose last year amid stiffer competition for state-owned Gazpom from privately-owned firms such as Novatek and Lukoil.
Total natural gas output rose by 2.1 percent to 668.0 billion cubic metres (23.6 trillion cubic feet).
Gazprom's production was reported at 476.1 billion cubic metres -- down from 478.8 billion cubic metres in 2012 and well off 2011 output of 513.1 billion cubic metres.
The drop reflects the reality that almost all of Gazprom's foreign sales are focused on European and post-Soviet countries now experiencing some of the slowest growth rates in the world.
Gazprom has also been slow to shift its focus to liquefied natural gas (LNG) production that could help it reach the growing markets of Asia and Latin America.
Russia's shale supplies are only now being probed in detail and estimates vary over how much oil and natural gas they might hold.
The US Energy Information Adminstration (EIA) said last year that Russia had the world's largest supplies of shale oil but only the ninth-biggest quantity of such untapped natural gas.
But the report said that most of Russia's shale oil rested in western Siberia's Bazhenov formation that is particularly difficult to extract.
The EIA believes only only six percent of that oil may be reached with currently available technology.
But both the US major ExxonMobil and Anglo-Dutch Shell have expressed an interest in working with Lukoil and Rosneft on developing the potentially lucrative field.
Lukoil vice president Leonid Fedun told the Financial Times in September that he believed that "in 20 years, the Bazhenov might be Russia's main source of oil -- even bigger that the Arctic oceans".
Source: AFP