Russian oil output may fall without aid

http://archive.gulfnews.com/articles/09/02/14/10285425.html

02/14/2009 07:07 PM | Bloomberg

Moscow : Russia’s oil output may fall almost 8 per cent by 2013 unless the government takes additional measures to spur new exploration and production, Energy Minister Sergei Shmatko said.

Crude production could drop to 450 million metric tonnes (9.04 million barrels a day), compared with 488 million tonnes in 2008, Shmatko told a government meeting held in Kirishi outside St Petersburg.

“There is an acute shortage of capital in the industry,” Shamtko told the meeting chaired by Prime Minister Vladimir Putin. “The sector is stagnating.”

Russian oil companies, after a year of record prices, are struggling with the tax burden and the expense of opening new developments in eastern Siberia and the Arctic. Crude production last year fell for the first time in a decade as older fields in western Siberia dry up.

Tax breaks introduced last year allowed oil companies to save 500 billion roubles (Dh52.89 billion), Putin said in his opening remarks.

Putin gathered key ministers and oil industry chiefs at a similar meeting in July in the northern port of Severodvinsk.

Shmatko said Russian oil companies cumulatively paid 4.4 trillion roubles in taxes last year and called for a “renewal” of the taxation system. With the collapse in oil prices and the tightening availability of credit, producers face an investment shortage of 200 billion roubles this year, he said.

Should the government give oil producers assistance in the form of tax breaks and state guarantees for loans, crude production could rise rather than fall, Shmatko said. With the right stimulus measures, output could grow to 511 million tonnes by 2013, he said.

 

 

Russia reports decline in oil, gas output

MOSCOW, Feb. 4 (UPI) — Russian oil output fell to 300 million barrels in January while natural gas production followed, falling to 1.9 trillion cubic feet, the Energy Ministry said.

The declines represent about a 1 percent decline in oil output and roughly 13 percent for natural gas. Exports, meanwhile, declined by 2.3 percent for oil and nearly 75 percent for natural gas, RIA Novosti reported Wednesday.

Russia blamed the decline in natural gas exports on the gas row with Ukraine. Ukraine hosts 80 percent of the natural gas bound for Europe. Disputes in January halted those supplies for weeks.

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Russian oil exports profitable again

MOSCOW, Feb 4 (Reuters) – Russian oil exports, which were loss-making at the end of last year, returned to profitability in January thanks to tax reforms and a weaker rouble, Alfa Bank said on Wednesday.

Alfa said in a report that upstream export profitability amounted to around $9 per barrel in January, compared with a loss of the same amount at the end of December and a $19 per barrel loss at the end of November.

“This year has seen a sharp reversal in export profitability,” Alfa said in a research note.

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Russia cuts oil export duty from February 1

MOSCOW (RIA Novosti) – Russia is lowering as of February 1 export duties on oil and petroleum products, responding to a fall in world oil prices amid the ongoing global financial crisis

Under the government decree signed by Russian Prime Minister Vladimir Putin on Thursday, the oil export duty now stands at $100.9 per metric ton compared with the previous export duty of $119.1 per ton.

As of February 1, the duty on light petroleum products totals $80.3 per ton against the previous $92.6 per ton and on heavy petroleum products $43.2 per ton against the previous $49.9 per ton.

Last year, the government abandoned its previously accepted bimonthly practice of monitoring the price of the Urals blend on world oil markets and from December 1 switched to setting export duties on oil and oil products on a monthly basis to respond more swiftly to changes in world oil prices.

Alexander Sakovich, deputy head of the Finance Ministry’s customs payments department, earlier said the average oil price was $40.16 per barrel from December 15, 2008, through January 14, 2009.

The global financial crisis has forced Russia, which receives a large part of its revenues from oil exports, to gradually devalue the ruble amid capital flight and a fall in world oil prices, which have declined from their peak of $147 per barrel in July to just around $40 per barrel.

For full article http://www.tehrantimes.com/index_View.asp?code=188337

Riches at the North Pole

By Matthias Schepp and Gerald Traufetter

In a new national directive, Russia has asserted claims on large sections of the Arctic Ocean. The tone of the document is openly aggressive, prompting fears of increasing international tension over who has the right to exploit the mineral-rich territory.

Cold temperatures and boredom are normally the order of the day at Russia’s northernmost border post on the Arctic Ocean island of Alexandra Land. Icebergs as big as houses drift past, while old diesel drums stand silent in the dry air.

REUTERS

Everybody wants a bit of the Arctic these days. Here, the midnight sun in the Arctic Circle near the Norwegian town of Longyearbyen.

Gone are the days when the engines of bombers carrying nuclear warheads droned over Nagurskoye military station. Nowadays, there is only one flight a month to the station, which is home to 30 soldiers, 16 scientists and six meteorologists who report to the FSB, Russia’s powerful domestic intelligence service. They live in austere wooden huts, braving the indifference of the Arctic.
In September of last year, this ghost station of the Cold War was suddenly returned to the center of geopolitical events, when two dozen government representatives were flown there, including Defense Minister Anatoly Serdyukov. They quickly agreed that “the Arctic must become Russia’s main strategic base for raw materials.” Nikolai Patrushev, the secretary of the Security Council of Russia, was quick to point out: “If we do not become active now, we will simply be forced out.”
The group of powerful men decided to have a comprehensive strategy prepared for development of the Arctic by 2020. The document will be released this week.
Some of the content has already been leaked, revealing an uncompromising tone. “It cannot be ruled out that the battle for raw materials will be waged with military means,” the explosive document reads.

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Russian oil production down

For the first time in ten years, Russia oil production in 2008 decreased. The country last year produced a total of 488,1 million tons, which is down 0,7 percent from 2007. Also exports are falling.

Russian officials have long not wanted to admit it. However, the inevitable last year became evident – Russian oil production is over the top and falling, newspaper Vedomosti reports.

Of the top five Russian oil companies, only Rosneft last year managed to uphold growth. The company’s production growth totalled 113,85 million tons, which is up 12 percent from 2007. Lukoil had a production of 90,2 million tons, which is down 1,3 percent. TNK-BP had a 0,9 percent drop and ended up with a 2008 production of 68,8 million tons. Surgutneftegaz produced 61,7 million tons of oil, which is 4,6 percent less than in 2007. Gazprom Neft produced 30,7 million tons, which is a decrease of 5,9 percent.

The main reason for the drop is the drying out resources of Western Siberian fields, Vedomosti writes.

In addition, also Russian oil exports are dropping. In 2008, the country exported a total of 203,091 million tons, which is 6,2 percent less than in 2007.

continue reading http://www.barentsobserver.com/russian-oil-production-down.4542842-16149.html

Oil down for fifth day, falling 8% on demand worries

NEW YORK (MarketWatch) — Crude-oil futures fell Monday for a fifth straight session, tumbling nearly 8% to close at the lowest level in more than two weeks, as concerns about a sharp slowdown in energy demand continued.

Written by Polya Lesova & Moming Zhou, MarketWatch

Crude for February delivery ended down $3.24, or 7.9%, at $37.59 a barrel on the New York Mercantile Exchange, the lowest closing level since Dec. 24. Earlier, the contract skidded to an intraday low of $37.48 a barrel.

Oil has lost more than $11, or 23%, in the past five sessions.

“The demand destruction amid continued weakness in the global economy, coupled with excess supply in the market at the moment, is likely to continue to dominate sentiment,” said Nimit Khamar, analyst at Sucden Financial Research.

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Russia May Join OPEC, Cut Oil Output to Boost Price

Written by Maria Ermakova for Bloomberg

Dec. 11 (Bloomberg) — President Dmitry Medvedev said Russia may join the Organization of Petroleum Exporting Countries and reduce production to support the oil price.

“We have to defend ourselves,” Medvedev said in the Ural Mountains city of Kurgan today. “This is our revenue base, both from oil and from gas,” he said. “I believe that we mustn’t rule out any options.”

Defensive measures may include “cutting the volume of oil production and participating in existing organizations of suppliers, and in new organizations, if we can reach such an agreement,” Medvedev said in comments broadcast on state television.

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Rosneft Profit Beats Estimates as Oil Rises to Record

By Greg Walters

Dec. 1 (Bloomberg) — OAO Rosneft, Russia’s largest oil company, posted third-quarter profit that exceeded analysts’ estimates after crude prices rose to a record.

Net income climbed to $3.47 billion from $1.93 billion a year earlier, the Moscow-based company said today in an e-mailed statement. That beat the $2.68 billion median estimate of 10 analysts surveyed by Bloomberg News.

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Oil Exports Plummet on High Duties

By Tanya Mosolova / Staff Writer

November oil exports fell to their lowest level since 2004 as firms cut supplies because of high export duties while output headed for its first decline in a decade.

Falling shipments have become a major concern for the government since the budget depends heavily on oil-export revenues.

Energy Ministry data showed Tuesday that Russian oil exports via pipeline monopoly Transneft stood at 3.70 million barrels per day in November, down by 12 percent from 4.21 million bpd in October. Oil companies had threatened to cut November deliveries by as much as a quarter because they said exports were loss-making with an export duty at $287 per ton ($39 per barrel). The average price for Urals blend crude was about $55 per barrel.

The decrease in exports made the government change the scheme of calculating the oil export duty, which, starting from December, will be set monthly instead of once every two months.

The December oil-export duty calculated under the new scheme was set at $192.1 per ton, almost a $100-per-ton decrease from the November level, but oil firms have said it was still too high to make exports attractive.

Viktor Vekselberg, one of the major shareholders at BP’s Russian venture, TNK-BP, said last week that the new export duty would help oil firms survive but was not enough to encourage investment.

The Energy Ministry data also showed that Russia’s oil production fell by 0.4 percent to 9.82 million bpd in November from 9.86 million bpd in the previous month.

Oil output fell throughout the first half of the year, and analysts had expected that it would recover in the second half after a number of oil companies started new fields.

The government, which had expected 2008 oil output to grow by 1 percent from the 9.87 million bpd produced last year, now predicts a decline of 0.5 percent to 9.82 million bpd.

The revised forecast may be too optimistic. Oil output has already declined by 0.8 percent this year, to 9.79 million bpd in January to November, from 9.87 million bpd in the same period last year.

It will be the first annual decline since 1998 in the country’s oil production, which rose by 2.3 percent last year after more impressive spikes in previous years, including a record 11 percent in 2003.

Falling oil production contributed to the general downturn in the country’s manufacturing sector, which fell more sharply in November than during the 1998 financial crisis.

The VTB Bank Europe purchasing managers’ index fell to 39.8, the lowest in its 11-year history and below the 50.0 mark that separates expansion from contraction.

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