OPEC Ministers to Meet Russia Amid Push to Extend Cuts

27 Apr 2017   OPEC, Russia

Consensus is moving in direction of prolonging deal: Al-Falih Saudi minister will speak to Russian counterpart this week The energy ministers of OPEC members Saudi Arabia and Venezuela plan to meet their Russian counterpart to discuss extending oil-output cuts amid a developing consensus that they should prolong their joint effort to curb supply. Saudi Minister of Energy and Industry Khalid Al-Falih said that he will talk with Russia’s Alexander Novak by phone this week and meet him within the next two weeks. Venezuela’s Oil Minister Nelson Martinez was also planning to visit Moscow after talks in Algeria on Wednesday, said a person familiar with the matter. Play VideoPlayMuteCurrent Time 0:00/Duration Time 0:00Loaded: 0%Progress: 0%Stream TypeLIVERemaining Time -0:00Playback Rate1 Chapters Chapters captions settings, opens captions settings dialog captions off, selected CaptionsFullscreen This is a modal window. No compatible source was found for this media. Captions Settings Dialog Beginning of dialog […]

Russia Thwarts ISIS Attack In Far East Oil Hub

27 Apr 2017   Russia

Russia’s Federal Security Service, the FSB, said on Wednesday that it had foiled an attempt by alleged Islamic State supporters to carry out a terror attack in a crowded place on the Far East Russian island of Sakhalin, which is an oil and gas hub. Sakhalin is the site of many oil and gas operations and currently has Russia’s only LNG plant. Gazprom and Shell are the major partners in the Sakhalin-2 venture, with Gazprom holding 50 percent plus one share, and Shell owing 27.5 per cent minus one share in Sakhalin Energy Investment Company Ltd—the Sakhalin II project operator. The Russian security service said today that they had detained two people—one citizen of a Central Asian republic and one Russian citizen—in the city of Yuzhno-Sakhalinsk, Sakhalin’s administrative center. During house searches, the FSB seized an improvised explosive device, components for making one, Islamic State propaganda material, and banned […]

Will Russia Join The OPEC Cut Extension?

26 Apr 2017   Russia

As the global oil supply glut grows, Russia has not yet climbed on board of OPEC’s production cut agreement extension. (Click to enlarge) (Click to enlarge) Chart of the Week (Click to enlarge) • At the end of March, U.S. natural gas storage levels stood at 2,051 billion cubic feet (Bcf), or about 15 percent above the five-year average. • Storage levels tracked average levels for most of the winter, but mild weather in February and March caused inventory drawdowns to slow. • But that pales in comparison to the same period a year ago, when inventories stood near an all-time high, pushing prices below $2/MMBtu. • Gas markets today are a bit more balanced, although slightly elevated storage levels could keep prices from rising to $4/MMBtu. Market Movers • Saudi Aramco says that the company should be valued at $2 trillion ahead of its IPO, but independent analysts […]

Energy Firms’ $5.1 Billion Financing for Russia Gas Pipeline Stokes EU Fears

25 Apr 2017   Europe, Russia

European energy firms pledged Monday to finance half the cost of a natural-gas link from Russia to Germany, lending support to a pipeline plan that is fueling tensions within the European Union. A consortium of five companies—Engie SA, OMV AG, Royal Dutch Shell PLC, Uniper SE and Wintershall Holding GmbH—said they would provide up to €4.75 billion ($5.1 billion) in long-term financing to Nord Stream 2 AG, a wholly owned…

Russia elbows Saudi Arabia aside as China’s top crude oil supplier in March

25 Apr 2017   China, Russia

Workers look at a drilling rig at a well pad of the Rosneft-owned Prirazlomnoye oil field outside the West Siberian city of Nefteyugansk, Russia, August 4, 2016. Russia reclaimed its position as China’s biggest crude oil supplier in March, customs data showed on Tuesday, displacing Saudi Arabia after two months in second place as Moscow fights to hang on to its slice of the Chinese market. Russian shipments grew nearly 1 percent to 1.104 million barrels per day (bpd) from the same month a year earlier, as China’s private refineries maintained high processing rates and restocked inventories after receiving fresh 2017 import quotas. China’s crude imports rose to a record in March, overtaking the United States and shattering expectations. Saudi shipments were 1.072 million barrels in March, up nearly 15 percent from a year ago, the General Administration of Customs said. For the first three months, Saudi arrivals stood […]

Russia’s Oil Cuts Won’t Be So Easy If OPEC Deal Is Extended

25 Apr 2017   Russia

Country typically increases output in second half of the year Rosneft and Lukoil plan higher spending and more drilling For Russian oil companies, the historic agreement to boost prices by cutting output in conjunction with the Organization of Petroleum Exporting Countries was an easy win. Extending the deal will be less straightforward. Cuts so far this year came alongside the traditional seasonal stagnation in Russian production, meaning the country made relatively few sacrifices in exchange for an increase in crude prices of more than 10 percent. For the powerful Russian oil bosses who plan to discuss the OPEC accord with Energy Minister Alexander Novak this week, a decision by the government to extend the cuts beyond June would stymie plans to boost output, creating many more headaches than the initial agreement. “It was not a surprise and not a big deal to have production going down in the first […]

U.S. Treasury says it will not issue drilling waivers to Russia sanctions

22 Apr 2017   Russia, USA

U.S. Treasury Secretary Steven Mnuchin arrives to meet with China’s Finance Minister Xiao Jie during the IMF/World Bank spring meetings in Washington, U.S., April 21, 2017. The U.S. Treasury will not give permission to U.S. companies, including Exxon Mobil Corp, to drill in areas prohibited by U.S. sanctions on Russia, Treasury Secretary Steven Mnuchin said on Friday. Mnuchin said in a statement that the decision had been made in consultation with President Donald Trump. (Reporting by Yeganeh Torbati; Editing by Andrew Hay)

Exxon Won’t Get Drilling Waiver for Russia, Mnuchin Says

22 Apr 2017   Russia, USA

Exxon Mobil Corp. won’t be allowed to bypass U.S. sanctions against Russia to resume drilling for oil in a joint venture that seeks to tap billions of barrels of that country’s crude. Treasury Secretary Steven Mnuchin said the decision was made after consultation with President Donald Trump, according to a statement on Friday. Exxon initially requested the drilling waiver in 2015 and pushed for approval every few months since then, according to a person with knowledge of the matter who wasn’t authorized to speak publicly. The waiver request drew criticism from a cross-section of leading U.S. policymakers, from Republican Senator John McCain, who wondered in a tweet whether Exxon was “crazy,” to Senator Bob Menendez, a New Jersey Democrat and sanctions hardliner who sits on the Senate Foreign Relations Committee. “We understand the statement today by Secretary Mnuchin in consultation with President Trump,” Alan Jeffers, an Exxon spokesman, said […]

Trump denies Exxon permission to drill for oil in Russia

22 Apr 2017   Russia, USA

The Trump administration has denied ExxonMobil permission to bypass sanctions to drill for oil in Russia. “The Treasury Department will not be issuing waivers to U.S. companies, including Exxon, authorizing drilling prohibited by current Russian sanctions,” Treasury Secretary Steven Mnuchin, said in a statement Friday. Mnuchin said he consulted with President Trump on the decision. Exxon had applied for a waiver from sanctions imposed by the Obama administration in a bid to resume its lucrative joint venture with Russian state oil giant PAO Rosneft. In a statement, Exxon said “we understand” the decision by the Treasury Department. Exxon explained that its application for a license was aimed at meeting the company’s “contractual obligations” in Russia, where competitors are allowed to drill under European sanctions. There are powerful reasons why Exxon would want to get back into business with Rosneft: Their agreement to form a joint venture, signed in 2011, […]

Russia says to discuss extending oil cut with OPEC on May 24

22 Apr 2017   Russia

Russian Energy Minister Alexander Novak said on Friday a decision on extending a global pact to cut oil production had not yet been taken, but would be discussed with OPEC on May 24. The Organization of the Petroleum Exporting Countries and other leading oil producers have pledged to curb output by 1.8 million barrels per day (bpd), with Russia’s contribution of cuts amounting to 300,000 bpd to be gradually phased in. The goal was to reduce bulging global inventories and lift oil prices. Despite a modest recovery in the market, oil stocks remain high and the focus is now on whether OPEC and non-OPEC producers will prolong the cuts into the second half of 2017. OPEC’s next policy-setting meeting is set for May 25, with a decision expected at that time on whether to extend the curbs. Novak said information on the oil market’s situation and forecasts were being […]

Russian gas project in the Arctic gets European support

22 Apr 2017   Russia

Financing for a liquefied natural gas project in the Arctic north of Russia by foreign creditors is a political win, Russian gas producer Novatek said Friday. Novatek, the largest private natural gas company in Russia, leads the project aimed at sourcing the markets in the Asian-Pacific. It controls 60 percent of the project in the Arctic north of Russia, alongside French energy company Total and the China National Petroleum Corp. Novatek CEO Leonid Mikhelson said unnamed export credit agencies in Germany and Sweden have joined the financing model for the LNG project. “The project is actually supported in terms of international funding volume, but I believe participation of Germany and Sweden is highly important politically,” he was quoted by Russian news agency Tass as […]

Russia Hits 250,000 Bpd Oil Production Cut Milestone

22 Apr 2017   OPEC, Russia

Russia has cut 250,000 bpd of its crude oil output, with another 50,000 bpd to go as per its agreement with OPEC, Energy Minister Alexander Novak told media today, adding that the other 50,000 bpd will be cut by the end of the month. The undertaking took as basis the country’s record-high October output, which exceeded 11 million bpd. Earlier this month, Novak said that the ministry will start discussing Russia’s possible participation in the production cut extension that is currently being negotiated by OPEC members in order to increase prices further, having failed to push them up to $60 a barrel since the start of the year. Novak said last week that “It still remains unclear whether the agreement should be extended. We’ll have consultations with our companies and other countries in the nearest future, and we have to see how he situation unfolds in April and consider […]

Russia To Help Build 2 Nuclear Power Plants In Iran

20 Apr 2017   Iran, Nuclear, Russia

Russian experts will help the Atomic Energy Organization of Iran build two 1,000-MW nuclear power plants, Iran’s Energy Minister told media. Construction will start soon, Hamid Chitchian also said, adding that a third joint power plant construction project with Russia, which will have a capacity of 1,400 MW, has already begun. The announcement is part of deepening ties between Moscow and Tehran, expanding into a growing number of industries, from oil to defense and fisheries. Earlier this year, Russian Energy Minister Alexander Novak said that Russian companies are “keen” on strengthening their ties with Iran, not least in the power plant construction sector. Energy-hungry Iran plans several more such projects, and it’s likely that Russian companies will be among the preferred bidders. Yesterday, Iran’s ambassador to Russia said in a statement that Tehran would be happy to strengthen bilateral ties further, noting their joint stance on the political situation […]

Exxon Seeks U.S. Waiver to Resume Russia Oil Venture

20 Apr 2017   Russia, USA

Exxon Mobil Corp. has applied to the Treasury Department for a waiver from U.S. sanctions on Russia in a bid to resume its joint venture with state oil giant PAO Rosneft, according to people familiar with the matter. Exxon has been seeking U.S. permission to drill with Rosneft in several areas banned by sanctions and applied in recent months for a waiver to proceed in the Black Sea, according to these people. The…

Exxon Mobil Seeks U.S. Sanctions Waiver for Oil Project in Russia

20 Apr 2017   Russia, USA

Exxon Mobil is pursuing a waiver from Treasury Department sanctions on Russia so it may drill in the Black Sea in a venture with the Russian state oil company Rosneft , a former State Department official said Wednesday. An oil industry official confirmed the account. The waiver application was made under the Obama administration, the officials said, speaking on condition of anonymity, and the company has not dropped the proposal. The proposal is now before the Trump administration at a delicate time in Russian-American relations, with rising tensions over the war in Syria and a looming congressional inquiry into reports of Russian efforts to influence the United States presidential election. The appeal did not come up during Senate confirmation hearings of Secretary of State Rex W. Tillerson , who was Exxon Mobil’s chief executive before his appointment by President Trump and was known to have a strong […]

Exxon seeks waiver from U.S. sanctions on Russia:

20 Apr 2017   Russia, USA

Exxon Mobil Corp ( XOM.N ) has applied to the Treasury Department for a waiver from U.S. sanctions on Russia as the oil major looks to resume its joint venture with Rosneft ( ROSN.MM ), the Wall Street Journal reported on Wednesday. Exxon has been seeking permission from the United States to drill with the Russian state-owned Rosneft in certain banned areas and applied in recent months for a waiver to proceed in the Black Sea, the newspaper reported, citing people familiar with the matter. ( ) The company wound down drilling in Russia’s Arctic in 2014 in the face of U.S. sanctions targeting cooperation between Western companies and Moscow’s oil sector. Exxon and Rosneft in 2012 unveiled an offshore exploration partnership that could […]

Russia interested in oil and gas opportunities in Senegal

18 Apr 2017   Russia, Senegal

Russia has an opportunity to foster a better trade relationship with Senegal, an emerging West African oil producer, the Russian foreign minister said.  Russian Foreign Minister Sergei Lavrov hosted his Senegalese counterpart, Mankeur Ndiaye, at his Moscow office to discuss opportunities in the energy sector.  “Our trade and economic cooperation has been on the rise, our companies have been looking at a number of promising projects in Senegal, including those in the oil and gas industry, ship-building and fishing sectors,” the Russia foreign minister was quoted by state news agency Tass as saying.  Russian interest in Senegal follows a March decision by the British subsidiary of China National Offshore Oil Corp. to outline areas of mutual interest offshore Gambia and Senegal with Australian energy company FAR Ltd.  FAR Ltd. has a stake in the SNE and FAN prospects off the coast of Senegal. When discovered in 2014, SNE in particular was considered one of the larger discoveries ever made. By the company’s estimates, more than 1.5 billion barrels of oil may be in basins off the coast of Senegal.

Russia takes conservative approach on the price of oil

15 Apr 2017   -, Russia

Russia is taking a conservative approach to the price of oil, pegging its scenario for growth at $40 per barrel for the nation’s benchmark Urals crude oil. “Taking into account that world oil reserves remain at a high level and intensive growth of shale oil production in the United States, we are lay[ing] down $40 per barrel price of Urals oil in our conservative scenario,” Economic Development Minister Maxim Oreshkin was quoted by Russian news agency Tass as saying. Economists at the Organization of Petroleum Exporting Countries reported Urals crude prices in March averaged $49.94 per barrel, a decline of 7 percent from the February average. All major crude oil benchmarks lost value in March, though the downturn for Urals crude […]

Libya’s Haftar says Russian base not being discussed – RIA

13 Apr 2017   Libya, Russia

The question of a Russian military base being set up on Libyan territory is not being discussed, Russia’s RIA news agency quoted Libyan military commander Khalifa Haftar as saying on Thursday. (Writing by Christian Lowe; Editing by Alexander Winning)

Russia plans to cut oil output by 300,000 barrels per day

13 Apr 2017   Russia

Russia says it will cut 300,000 barrels of oil per day from its production levels by the end of the month in coordination with an OPEC-led agreement. File Photo by tcly/Shutterstock April 12 (UPI) — According to state media in Russia, the country’s oil minister has upped the ante on how much the country will cut out of its production levels through June. “Our plans have not changed — by the end of the month we will reduce daily reduction of oil output of 300,000 barrels,” Russian Energy Minister Alexander Novak was quoted as saying by state news agency Tass. “We will maintain this level in May-June.” Tass reported Tuesday that total crude oil production from Russia last month was 11.04 million barrels per day, about 67 percent toward a quota outlined in a deal with OPEC, but also cited the minister as saying cuts by the end of […]

Russia stands by OPEC oil production commitments

12 Apr 2017   Russia

Russia will be 100 percent in compliance with the terms of a production deal coordinated by OPEC by the end of the month, Russia’s oil minister said. Russia is the largest contributor among non-member states to a deal implemented in January by the Organization of Petroleum Exporting Countries. According to Russian news agency Tass, total crude oil production from Russia last month was 11.04 million barrels per day, a decline from the benchmark used by OPEC of 202,300 barrels per day, or about 67 percent of its quota. Russian Energy Minister Alexander Novak said that, at the very least, full compliance to a cut of 250,000 barrels per day could come by the end of the month, possibly sooner. Russia last year was […]

Fixing Russia’s Growth for Economists Takes One Ruble at a Time

10 Apr 2017   Russia

The ruble’s “ serious weakening ,” as forecast by Russia’s Economy Ministry, may be seriously good for growth. While the authorities in Russia have wavered this year over the benefits and disadvantages to the economy of a strong exchange rate, analysts are coming down on the side of depreciation. A weaker ruble is better for growth in the view of more than half the 19 analysts in a Bloomberg survey . “As Russia is still export-orientated and many of the big corporations have revenues in U.S. dollars, a weaker ruble is favored over a too-strong ruble as it keeps them competitive in what remains their main source of income,” said Christopher Shiells, senior emerging-market analyst at Informa Global Markets in London. Given the ministry’s updated baseline outlook released last week, Russia may get just what it needs to give the economy a pop after almost two years of recession. […]

Politics Eclipse Carry as Ruble Tumbles After U.S. Syria Strikes

8 Apr 2017   Russia

Russia’s ruble fell the most among major global currencies on Friday and the nation’s borrowing costs climbed after U.S. airstrikes on Syria dimmed hopes for improved ties under Donald Trump. The Russian currency weakened 1.4 percent against the dollar by 6:20 p.m. in Moscow, the most in almost a month, after Russian President Vladimir Putin slammed the attacks as an “act of aggression.” Stocks posted the steepest drop worldwide, credit default swaps climbed for the first time this week, and yields on local-currency government bonds advanced. Rebounding oil prices and attractive real interest rates have made the ruble one of the best-performing currencies in developing nations this year amid a global hunt for higher returns. Russian markets rallied after Trump’s November election, but the strikes, in response to Syrian leader Bashar al-Assad’s alleged use of poison gas to kill scores of civilians, show the chances of a detente are […]

Saudi Arabia Vs. Russia: The Next Oil Price War

International oil markets could be heading towards a new war, as leading OPEC and non-OPEC producers are vying for increased stakes. The unexpected cooperation between OPEC and non-OPEC countries, instigated by the full support of Saudi Arabia (OPEC) and Russia (non-OPEC) has brought some stabilization to the crude markets for almost half a year. The expected crude oil price crisis has been averted, it seems, leaving enough room when looking at the fundamentals to a bull market in the coming months. As long as Saudi Arabia, Russia and some other major producers (UAE, Kuwait), are supporting a production cut extension, financials will be seeing some light at the end of the tunnel. The effects of the 2nd shale oil revolution, as some have stated, have been mostly mitigated by a reasonably high compliance of OPEC and non-OPEC members to the agreed upon cuts, while geopolitical and security issues have […]

Russia sees slow economic growth irrespective of oil prices

6 Apr 2017   Russia

Even if crude oil prices move above $60 per barrel, the Russian economy likely won’t expand much more than 1 percent, the head of the central bank said. Russia’s economy lingered in recession last year and the national currency, the ruble, declined in value after crude oil prices dipped below $30 per barrel. So far in April, crude oil prices have posted steady gains amid signs the global market was returning to balance following a long period of oversupply. The price for Brent crude oil was marching toward $55 per barrel in early Wednesday trading. Russian Central Bank Chief Elvira Nabiullina said the national economy is becoming less dependent on crude oil prices and growth won’t improve […]

When Will Russia Run Out Of Oil?

5 Apr 2017   Russia

On a global level, 2015 and 2016 marked the lowest level of new conventional oil discoveries since 1952. In 2016, only 3.7 billion barrels of conventional oil were discovered, roughly 45 days of global crude consumption or 0.2 percent of global proved reserves. Globally, exploratory drilling fell by almost 20 percent in 2015 and fell even further in 2016. Russia’s exploration activities, which were hit not only by plummeting oil prices but also by a targeted sanctions regime, suffered a double blow during this period. In 2015, only seven new hydrocarbon discoveries were made in Russia, three of them in the Baltic Sea. In 2016, oil and gas companies in Russia discovered 40 prospective fields , however, the 3P reserves of the largest among them, Rosneft’s Nertsetinskoye, amounted to 17.4 million tons. This stands in stark contrast with pre-sanction period achievements, for instance, 2014’s largest find, Pobeda, is believed […]

Gazprom boasts of expanding gas exports

4 Apr 2017   Russia

Days after opposition to a pipeline expansion project fell, Russian energy company Gazprom said its natural gas sales to foreign countries are up 15 percent. Russia is one of the main suppliers of natural gas to the European economy. Gazprom, the dominant gas player, said exports during the first quarter were up nearly 20 percent for the German economy, 24 percent to Poland and 14 percent for France. According to a review of the data by Russian news agency Tass, Gazprom gas supplies to foreign countries were up 15 percent year-over-year during the first quarter. That supports a January report from S&P Global Platts, which found European demand for natural gas accelerating against declining domestic production. The figures from Gazprom follow a report last […]

OPEC Deal Pushes Russian Oil Output Down 1.6 Percent From Peak

3 Apr 2017   Russia

Russia cut its crude production in March, moving closer to fulfilling its agreement with OPEC as the deadline approaches. Production of crude and condensate fell to 11.05 million barrels a day, down 1.6 percent from Russia’s post-Soviet high of 11.23 million barrels in October, according to data from the Energy Ministry’s CDU-TEK statistics unit. Russia has committed to reducing supply by as much as 300,000 barrels a day by the end of this month. Russia is the largest of the 11 non-OPEC producers cooperating with the Organization of Petroleum Exporting Countries to reduce oil supplies by a combined 1.8 million barrels a day to neutralize a global glut. Brent crude closed Friday at $52.83 a barrel, up 19 percent from its November low before the deal was announced. Five OPEC members have signaled their support for extending the six-month deal, along with non-member Oman, which also joined the agreement […]

Rosneft takes key step in push into Middle East

3 Apr 2017   Middle East, Russia

Russia’s Rosneft will this week take custody of its first independently sourced cargo of Kurdish crude oil from Turkey’s port of Ceyhan, a key step in its strategic push into Middle East energy markets and its attempts to expand trading. The world’s largest listed oil company by output has spent the past four months trumpeting agreements to buy oil from Egypt, Libya and Iraqi Kurdistan, drilling exploration wells in southern Iraq and mulling opportunities in Lebanon, as it chases deals to fuel its fledgling international expansion.

Russian Economy Crawled to Growth With Recession in Rearview

1 Apr 2017   Russia

Russia’s economy returned to growth at the end of 2016, turning the page on seven consecutive quarters of contraction that laid waste to the middle class after oil prices crashed. Gross domestic product gained 0.3 percent from a year earlier in the fourth quarter after a decline of 0.4 percent in the previous three months, the Federal Statistics Service said Friday. That matched the median of 11 estimates in a Bloomberg survey. GDP shrank 0.2 percent in the full year, the statistics service said, confirming its first reading. The challenge for the world’s biggest energy exporter now is for its recovery to gain traction as consumer demand continues to sag and the outlook for oil remains dim. Russia may now be at a turning point as capital-intensive businesses […]

Putin Exploits Europe’s Divisions in Bid to Dominate Gas Supply

This small port town offers a textbook case of how Russian President Vladimir Putin has thwarted U.S. and European efforts to rein in Moscow’s most powerful source of leverage and cash: energy. Karlshamn’s local leaders in January opened its port to Russia’s state-owned energy company, PAO Gazprom, in defiance of Swedish national authorities alarmed by a growing Russian military presence in the Baltic Sea. A subcontractor for a Gazprom subsidiary is now allowed to store pipes here for an $11 billion…

Russia Reaches 2/3 Of Oil Output Cut Target

31 Mar 2017   OPEC, Russia

Russia has cut crude oil production by 200,000 barrels daily , Energy Minister Alexander Novak said. That’s two-thirds of the amount it agreed to cut under the OPEC-non-OPEC agreement closed at the end of last year. The 300,000-bpd reduction that Russia agreed to represents 2.7 percent of its October output, which exceeded 11 million bpd . This went up to 11.23 million bpd in November – the month that was taken as the basis, from which individual cut quotas were assigned. The country, which was the largest non-OPEC producer that signed up for the cut agreement, said it would reduce production gradually, raising suspicions about whether it will try to find a way around it. Still, the amount is small compared to its total daily output, and the cut will be helped by the start of maintenance season. Together, OPEC and the 11 non-OPEC producers that signed up for […]

Russian oil company reached Iraqi production milestone

29 Mar 2017   Iraq, Russia

Russian oil company Gazprom Neft said it passed a milestone with operations in Iraq by passing the 5 million barrel mark for cumulative production in 2017. The company said it commissioned four wells at the Badra oil field so far this year, bringing the combined total to 14 wells at the field. Total daily production has increased to 80,000 barrels and total output so far this year is in excess of 5 million barrels. “The Badra project is going according to plan, and it’s clear that the infrastructure necessary for increasing oil production is already in place,” project director Denis Sugaipov said in a statement . The company, the oil arm of Russian gas company Gazprom, brought Badra online in late 2013 and tested new pipeline […]

Russia Can Wait for $70 Oil Before Returning to Arctic Waters

29 Mar 2017   Arctic, Russia

Russia can wait for a sustained recovery in oil prices before drilling again in Arctic waters, relying for now on less costly regions even as rival producer Norway accelerates development of its northerly fields. “We estimate production costs for the Russian Arctic offshore in the range of $70 to $100 a barrel,” Energy Minister Alexander Novak said by email. These reserves “are our backup stock,” he said before the International Arctic Forum in Russia’s Arkhangelsk, which starts Wednesday. While crude is languishing at around $51 a barrel — less than half the price of mid-2014 — analysts at Morgan Stanley forecast a rebound to $70 by the end of 2019 as bloated global stockpiles decline. As Russia waits, Norway’s Arctic waters may host a record number of wells this year following recent discoveries, new government license awards and efficiency gains. Russia plans to boost exploration in the Arctic Barents […]

Russia’s Lukoil to invest more offshore this year

28 Mar 2017   Russia

Russian oil company Lukoil aims to invest at least four times as much on offshore oil and gas exploration than it did last year, a resources minister said. One of Russia’s largest oil companies, Lukoil said its oil production for 2016 was 8.6 percent lower than in 2015, but higher for the fourth quarter by about 2.5 percent. About 95 percent of total Lukoil production volume comes from reserves in Russian territory. Sergei Donskoi, the Russian minister for natural resources and the environment, told news agency Tass that energy companies in Russia were expected to spend more on offshore oil and gas exploration this year. “The plan for 2017 [for Rosneft] is to spend $750 million, which is almost a four-fold increase […]

OPEC Be Warned: Russia Battens Down the Hatches for Oil at $40

25 Mar 2017   Russia

Perhaps the Bank of Russia knows something the world doesn’t. As the Organization of Petroleum Exporting Countries and its allies prepare to meet for a review of their production cuts this weekend, the central bank of the world’s biggest energy exporter is hunkering down for years of oil near $40 a barrel. While analysts in a Bloomberg survey see the price of benchmark Brent crude — which trades at a small premium to Russia’s Urals export blend — rising 16 percent from current levels by the end of the year, oil’s 10 percent decline in March alone amid supply woes is making the market nervous. Russia, a key partner in the deal and a participant in the talks in Kuwait, might only add to those jitters. “The Finance Ministry, the cabinet and the central bank are leaning on the cautious side in terms of their expectations regarding growth, driven […]

Russia, Saudis Move at a Different Pace as Oil Cuts Scrutinized

24 Mar 2017   OPEC, Russia, Saudi Arabia

Russia and Saudi Arabia head to this weekend’s OPEC committee meeting as the tortoise and hare of a global deal to cut oil supply, with Moscow sticking to a slow and steady pace despite Riyadh’s cajoling. OPEC’s de-facto leader Saudi Arabia publicly prodded the Kremlin to speed up and implement its full 300,000 barrel-a-day production cut by the end of this month, but Energy Minister Alexander Novak reiterated it won’t reach the target before April — four months into the agreement. While this pace has offset the impact of deeper-than-expected cuts by other OPEC members, the need to show unity means Russia is unlikely to get called out for its inertia, said Daniela Corsini, a Milan-based analyst at Intesa Sanpaolo SpA. “Confidence in the OPEC/non-OPEC deal is the most important tool to protect crude prices,” Corsini said by email. “Saudi Arabia will not openly criticize poor Russian compliance as […]

Putin insists Europe needs expanded gas pipeline

24 Mar 2017   Europe, Russia

An expansion to a Russian gas pipeline running offshore to Germany makes sense given production declines in Europe, Russia’s president said. Russian natural gas company Gazprom is one of the dominant suppliers of natural gas for the European economy. The company aims to increase its footprint with the expansion to its twin Nord Stream natural gas pipeline system that runs through the Baltic Sea to Germany and then onto the European market. Gazprom started calling for tenders to lay the sections of the planned pipeline in the deep waters of the Baltic Sea in early 2016 and maintains the additional components could be in service at some point in 2019. Russian President Vladimir Putin said during a meeting with officials with Germany energy company BASF, […]

Will Russia Ditch Its Ambitious Oil Tax Reform?

24 Mar 2017   Russia

2018 was supposed to be a transformative year in Russia – presidential elections are looming, the Russian economy is expected to bust out of its current slump and the oil sector’s tax regime was set for significant changes. The long-mooted move to implement a switch to an excess-profits tax-based (EPT) regime has long been the pet project of Russia’s Ministry of Finances, yet recent developments suggest the ambitious scope of the proposed reforms will most likely be brought to naught. It would be a shame if this happens, as the EPT would be conducive both to the revival of Western-Siberian oil fields and the kick-starting of new resource-rich productive formations. Most industry actors agree that the current oil taxation regime in Russia is inefficient, stymieing the development of new fields in Eastern Siberia and other as of yet largely untapped regions and the enhancement of production from brownfield projects […]

The world’s deepest oil well is over 40,000 feet deep

24 Mar 2017   -, Russia

In the world’s deepest gold mine , workers will venture 2.5 miles (4 km) below the Earth’s surface to extract from a 30-inch (0.8m) wide vein of gold-rich ore. While these depths are impressive, mining is limited by the frailty of the human body. Going much deeper would be incredibly dangerous, as limitations such as heat, humidity, logistics, and potential seismic activity all become more intense. Luckily, the oil industry does not have such human obstacles, and drilling deep into the Earth’s crust is instead limited by a different set of circumstances – how deep can the machinery and technology go before the unfathomable heat and pressure renders it inoperable? The world’s deepest oil well Today’s infographic comes to us from Fuel Fighter , and it helps to visualize the mind-boggling depths of the world’s deepest oil well, which is located in a remote corner of eastern Russia. The […]

Russia will play OPEC ball, report finds

23 Mar 2017   OPEC, Russia

Russia is likely to play along with what’s expected to be another six months of OPEC production cuts despite lackluster compliance, a new report finds. Members of the five-member committee monitoring a managed production decline agreement from the Organization of Petroleum Exporting Countries meet during the weekend in Kuwait to consider the durability of the deal. The monitoring team counts Russia as a member. Russia is among the parties contributing to the agreement and is expected to contribute most to production declines from producers outside OPEC. Russia’s contribution is vital to the arrangement, though the Kremlin offered mixed support for the agreement last year after publicly stating in […]

Is A Russian-Iranian Energy Pact In The Making?

21 Mar 2017   Iran, Russia

In the lead-up to President Rouhani’s visit to Moscow, expected to take place in late March , a plethora of news regarding joint Russo-Iranian energy projects has been circulating on the Internet. A three-year long negotiation process regarding a 100,000 barrels-per-day swap contract is believed to be agreed upon, premised on Iran providing Russia (most likely, Rosneft) oil from Kharg Island or other hubs in the Persian Gulf in return for cash and Russian goods that Iran would “require”. Teheran also woos LUKOIL, currently Russia’s only major oil producer in the Caspian, to participate in swap deals bound for Iran’s Neka Port (in return for Iranian crude provided from Kharg Island or other Persian Gulf hubs), albeit on a much smaller scale at 4000 to 5000 barrels per day. To top it all up, numerous Russian oil companies have committed themselves to developing Iran’s hydrocarbon fields. The lifting of […]

Russia enlarges military footprint in Libya

21 Mar 2017   Libya, Russia

Libyan Field Marshall Khalifa Haftar, a fiery commander in eastern Libya, has declared war against radical Islamists, including the Islamic State and al-Qaida, but is controversial for perceived iron-fist tactics. Photo courtesy of Wikipedia TUNIS, March 20 (UPI) — Russia, 19 months after becoming a key player in the Syrian war, is increasing its military presence in Libya and is likely to back Libyan Field Marshal Khalifa Haftar in the tumultuous civil conflict. Haftar, a fiery commander in eastern Libya, has declared war against radical Islamists, including the Islamic State and al-Qaida, but is controversial for perceived iron-fist tactics. In September, Haftar gained control of main oil terminals in the country’s east but lost ground to Islamist forces early this month. While Haftar has received intelligence and security support from France, Britain and the United States, as well as backing from Egypt and the United Arab Emirates, Western countries […]

Oil-rich Russia revises GDP growth estimate higher

21 Mar 2017   Russia

As crude oil prices recover from last year’s historic decline, the Russian finance minister said the outlook for gains in gross domestic product have improved. Russia last year was producing oil at or near post-Soviet highs. According to economists at the Organization of Petroleum Exporting Countries, Russian oil companies were winning out because a decline in the value of the ruble made it economic to produce more oil for more revenue. Finance Minister Anton Siluanov said the ruble was overvalued at the moment. Looking ahead, growth in gross domestic production should settle between 1.5 percent and 2 percent, an improvement from previous estimates. “On the whole we agree that the economy will be growing faster than initially expected,” he was quoted by Russian news agency Tass as […]

Russia to cut oil output by 300,000 bpd by end-April: Energy Minister

18 Mar 2017   Russia

Russia will cut its oil output by 300,000 barrels per day by the end of April and will maintain production at that level until the global oil cuts deal expires at the end of June, Energy minister Alexander Novak said on Friday. Russia had cut output by 160,000 bpd by the middle of March, said Novak, a figure he said would reach 200,000 bpd by the end of the month. Asked if it was expedient to prolong the cuts deal that includes OPEC and non-OPEC oil producers, Novak said: “It’s too early to talk about it in the middle of March, (the matter) should be discussed and a decision should be made at […]

Russia’s Lukoil backs OPEC production cut extension

17 Mar 2017   Russia

It’s reasonable to give serious consideration to extending a production agreement led by OPEC, the head of Russian oil company Lukoil said Thursday. Russia is contributing as a non-member state to an effort steered by the Organization of Petroleum Exporting Countries that aims to correct an oversupplied market through managed production declines. Russian Energy Minister Alexander Novak chaired a joint meeting with OPEC in December that called for voluntary managed declines from non-member states. The terms of the OPEC agreement, which went into force in January, extend for six months, with the option for an extension based on market conditions. Lukoil President Vagit Alekperov said he will look for clarity on the issue when the major producers meet again later this […]

Could Rosneft Take Control Of Citgo?

16 Mar 2017   Russia, USA, Venezuela

Rosneft could take control of 49.9 percent of Citgo – the troubled U.S. business of Venezuela’s state-owned oil company, media are warning. PDVSA used the stake as collateral for a $1.5-billion loan provided by Rosneft last year, and the Russian company immediately filed a lien with the Delaware Department of State asserting its right to ownership in case PDVSA defaults on debt payments. Now, the possibility of a default has become more pronounced, spurring speculation about what might happen should this possibility turn into a certainty. The loan deal itself sparked protests in the U.S. energy industry, with ConocoPhillips and a Canadian miner, Crystallex, asking the federal court in Delaware to cancel the lien, even though the use of stock as collateral in loan agreements is standard practice. This time, however, there are geopolitical implications weighing in, and it’s these implications that will, in all likelihood, make the idea […]

Russia reacts to steep drop in oil prices

15 Mar 2017   Russia

The dramatic drop in crude oil prices is in large part because of “aggressive” output in the United States, but OPEC still factors in, a Russian minister said. Crude oil prices declined 5 percent Wednesday after a federal U.S. report revealed dramatic gains in crude oil storage and production levels. The U.S. shale oil boom that evolved over the last decade put negative pressure on crude oil prices, leading to an ultimate plunge below $30 per barrel last year. That compared with a period three years ago where oil above $100 per barrel was relatively common. Russian Economic Development Minister Maxim Oreshkin was quoted by Russia news agency TASS as saying the resiliency of U.S. shale to lower crude oil prices was putting a ceiling […]

Russian oil major says U.S. shale growth imperils OPEC deal

14 Mar 2017   -, Russia, Shale Oil

A recovery in U.S. oil output may deter OPEC and non-OPEC producers from extending production cuts beyond June and might lead to a new price war, Russia’s top oil major said on Monday. U.S. shale oil production had been in retreat as oil prices tumbled from above $100 a barrel in 2014 to below $30 in 2015, making costly fracking processes less profitable. A deal by the Organization of the Petroleum Exporting Countries with Russia and other producers to rein in output by 1.8 million barrels per day (bpd) for six months from Jan. 1 lifted prices but also encouraged U.S. firms to boost supplies. “It became evident that U.S. shale oil output has become and will remain a new global oil price regulator […]

Saudi Arabia, Russia Offer United Front on Oil Supply Cuts

Saudi Arabia and Russia, the architects of an oil production cut that has stabilized prices, presented a united front on compliance just as rising U.S. inventories have sparked doubts about the OPEC and non-OPEC deal. Khalid Al-Falih, the Saudi energy minister, acknowledged that global crude inventories aren’t draining as quickly as he expected, opening the door for an extension of the production cuts into the second half of the year. The potential rollover is a subtle yet significant shift from just six weeks ago, when the minister said that an extension probably wouldn’t be needed. Al-Falih’s concern about the slow pace of stockpile reductions was echoed by Suhail Al-Mazrouei, the oil minister for the United Arab Emirates. Since the Organization of Petroleum Exporting Countries and some of its rivals, including Russia, agreed to cut output in late 2016, oil prices have stabilized at around $50-$55 a barrel, up from $45-$50 a barrel before. Yet, prices are struggling to rise further as U.S. crude stocks increased to record levels.  With the market starting to believe the cuts were backfiring by reviving U.S. oil production, Al-Falih and his Russian counterpart Alexander Novak called a news conference in Houston after a round of meetings to offer a united front, and insist the cuts will work.