Russia blames missed oil target on rise in gas condensate output

Installation work at the Moscow oil refinery is shown in this photo taken in 2017. (Shutterstock image)
Updated 21 October 2019

Russia blames missed oil target on rise in gas condensate output

  • Output falls but remains above global production cap as minister vows country will work to fulfill its obligations
  • OPEC, Russia and other oil producers, an alliance known as OPEC+, agreed in December to reduce supply by 1.2 million bpd from the start of this year

MOSCOW: Russia produced more oil in September than envisaged by a global deal due to an increase in gas condensate output as the country prepared for winter, local news agencies reported on Sunday.

Russian oil output edged down to 11.25 million barrels per day (bpd) last month from August’s 11.29 million bpd, but remained above the cap set under the global production deal.

Under the accord reached between the Organization of the Petroleum Exporting Countries (OPEC) and allied producers, Russia has agreed to reduce output by 228,000 bpd from an October 2018 baseline.

Energy Minister Alexander Novak has said the reduction totaled 200,000 bpd last month. He reiterated that the country would strive to fulfil its obligations this month in full.

“We had specific obligations related, among other factors, to dealing with the winter period, with the production of gas condensate,” TASS news agency quoted Novak as saying.

Output of gas condensate, a light oil, is included in Russian statistics on total oil production.

OPEC, Russia and other oil producers, an alliance known as OPEC+, agreed in December to reduce supply by 1.2 million bpd from the start of this year.

OPEC and its allies will meet on Dec. 5-6 in Vienna to review output policy.

Market participants believe the group known as OPEC+ could decide to extend production cuts “and wait until world demand catches up with the supply situation,” Andy Lipow, president of Lipow Oil Associates in Houston said last week.

OPEC Secretary-General Mohammad Barkindo has said deeper output cuts are an option and that OPEC would do what it could with allied producers to sustain oil market stability beyond 2020.

OPEC, Russia and other producers have agreed to cut oil output by 1.2 million barrels per day until March 2020.


Poland to stop importing gas from Russian state provider

Updated 3 min 57 sec ago

Poland to stop importing gas from Russian state provider

  • Poland has been working to reduce their dependence on Russian energy sources
  • The Polish company will terminate the contract as of Dec. 31, 2022
WARSAW: Poland’s state gas company said Friday it has notified Russia’s Gazprom that it will not extend a long-term deal on gas imports when it expires in three years.
The announcement comes as Poland has been working to reduce its dependence on Russian energy sources, which Moscow has sometimes used as a tool of political pressure on its partners.
The efforts to reduce dependency include striking long-term contracts for deliveries of liquefied natural gas from the United States, Qatar and other countries, as well as developing a new pipeline with Norway for deliveries from the North Sea.
The Polish company, PGNiG, said that, in line with the provisions of the deal, it had sent Gazprom, which is controlled by the Russian state, notice that it will terminate the contract as of Dec. 31, 2022. It said Poland will continue to have enough energy after that date.
Poland has repeatedly said that the financial terms of the Gazprom contract were unfavorable and that it was paying a higher price than others in Europe.
Poland uses some 14 billion cubic meters of gas a year. Under the contract with Gazprom it was obliged to import some 10 billion cubic meters of gas from Gazprom per year.