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Russian Oil Production and Export in Time of Low Prices and OPEC+

Russian Oil Production and Export in Time of Low Prices and OPEC+

Since May 2020, Russia has been in the second, much tighter version of the OPEC+ deal. It has already “eaten away” about 9% of national production – and this for the past year, too, of which for four months the restrictions were nominal rather than actual. This is a completely unprecedented artificial cut in both production and export. What effect this will have on the industry in the medium term remains open to question.

The government and many of the companies cheerfully report that the deal is temporary. As soon as the restrictions are removed, production will return to the previous level in 2-3 months.

In February, however, Russia was not even able to fill the increased production quota it had wrung out of the Saudis, which they hurried to explain with severe frost.

What, then, is actually going on in the production segment of the Russian oil industry? What is happening in export which is sagging even more than production? Is there actually a chance of restoring production and regaining the lost positions on the key markets? National Energy Security Fund will attempt to answer these questions in its new report.

The report gives a detailed account of the following aspects:

Compliance

  • When Russia joined the new deal, the Energy Ministry said that all companies without exception would have to cut down production on a proportional basis. However, by no means all corporations have complied with the order.
  • Who, then, has upheld the deal and who has not?
  • The report will make it possible to assess how Russia in general has upheld the deal, who has been a “good boy” and who a “stowaway”.

What has been cut?

  • Another important aspect is the uneven distribution of production cuts across fields. The companies decided themselves where to cut production.
  • You will find in the report the “cutting profiles” of the Russian integrated oil companies that will show what projects have experienced the most serious production decline and what fields have been left untouched.
  • You will also see the connection between the production cut decisions and the tax treatment of the projects. This will offer a clearer understanding of the actual medium-term prospects of the Russian upstream sector.

Positions of Russian crude blends in export markets

  • Analysis of the dynamics of Russian oil export to European and Asian markets is no less important. Russian oil is being “pushed” both by Russia’s “partner” in the deal, the Saudis (whose capability to promptly increase production is beyond doubt, too). And by the Americans who expanded their oil export even in 2020.

A forecast for future developments

Contents of the report:

INTRODUCTION 3
INFLUENCE OF OPEC+ 2020 DEAL ON OIL PRODUCTION IN RUSSIA. KEY COMPANIES’ COMPLIANCE DISCIPLINE 4
CHANGES AT KEY PRODUCTION ASSETS OF RUSSIAN OIL COMPANIES 18
Rosneft 18
Bashneft 21
Lukoil 22
Surgutneftegas 24
Gazprom Neft and Gazprom 26
Tatneft 30
Slavneft 31
Independent Petroleum Company 33
Production Sharing Agreements 36
STRATEGY OF RUSSIAN INTEGRATED OIL COMPANIES IN TIME OF OPEC+ DEAL: RESULTS OF 2020 AND FORECAST FOR 2021 38
OPEC+ 2020 DEAL EFFECT ON RUSSIAN OIL EXPORT 41
Dynamics of Russian oil export broken down by main channels and destinations 41
Sales of Russian Oil by Key Blends. Export Oil ‘Lightening’ Problem 49
Prospects for Promoting Russian Oil to Chinese Market 54
Change of US Export Preferences: Focus on Europe 64
MEDIUM-TERM IMPLICATIONS OF OPEC+ DEAL FOR RUSSIAN OIL INDUSTRY 70
Date of release: May 18, 2021

If you are interested to obtain please contact » Elena Kim

Other issues:
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Analytical series “The Fuel and Energy Complex of Russia”:

Hydrocarbon Rush to East: Current Status, Medium-term Prospects
Hydrogen as New Energy Hope
Russian Oil Production and Export in Time of Low Prices and OPEC+
State Regulation of Oil and Gas Sector in 2021 and Prospects 2022
Gazprom: Life after Major Construction Projects

All reports for: 2015 , 14 , 13 , 12 , 11 , 10 , 09 , 08 , 07

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