For every one dollar reduction in the price of oil, Russia suffers a staggering two billion dollar loss in its revenue. On top of the economic sanctions slapped on Russia following the annexation of Crimea, one may consider the record Russian oil production of 11.247 mbpd nothing short of a miracle. But how did Russia, while other oil producers were in doldrums, keep its nodding donkeys busy pumping oil? In the U.S., the rig count was falling every week and oil companies were filing for bankruptcy. Yet the Russian production in October touched a post-Soviet Era high. The secret to its success appears to be a combination of tax measures, the dollar value and the advantage of low-cost production. The Russian oil majors, Rosneft and Lukoil, which account for almost half of the country’s oil production, increased their capex spending last year. Rosneft’s increased capital expenditure last year by […]