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.


Oman’s sultan says government will work to reduce debt

Updated 23 February 2020

Oman’s sultan says government will work to reduce debt

DUBAI: Oman's Sultan Haitham bin Tariq al-Said said on Sunday the government would work to reduce public debt and restructure public institutions and companies to bolster the economy.
Haitham, in his second public speech since assuming power in January, said the government would create a national framework to tackle unemployment while addressing strained public finances.
"We will direct our financial resources in the best way that will guarantee reducing debt and increasing revenues," he said in the televised speech.
"We will also direct all government departments to adopt efficient governance that leads to a balanced, diversified and sustainable economy."
Rated junk by all three major credit rating agencies, Oman's debt to GDP ratio spiked to nearly 60% last year from around 15% in 2015, and could reach 70% by 2022, according to S&P Global Ratings.
The small oil producing country has relied heavily on debt to offset a widening deficit caused by lower crude prices. Also, the late Sultan Qaboos, who ruled Oman for nearly 50 years, held back on austerity measures.
The country has delayed introducing a 5% value added tax from 2019 to 2021, and economic diversification has been slow, with oil and gas accounting for over 70% of government revenues.
Last week, rating agency Fitch said Oman was budgeting for a higher deficit of 8.7% for 2020 despite its expectation of further asset-sale proceeds and some spending cuts.
"We are willing to take the necessary measures to restructure the state's administrative system and its legislation," Haitham said in his first speech since the mourning period for Qaboos ended, without elaborating.
He said there would be a full review of government companies to improve their business performance and competence.
Oman observers have said that if Haitham moves to decentralise power it would signal willingness to improve decision making. Like Qaboos, he holds the positions of finance minister and central bank chairman as well as premier, defence and foreign minister.