Moscow may not comply with further OPEC cut

Source:Reuters-Global Times Published: 2017/11/28 20:13:39

Oil output from Russia's Sakhalin-1 project is set to rise by about a quarter to 250,000-260,000 barrels per day (bpd) from January, sources with knowledge of the plan said, signaling Moscow may find it hard to comply with an extended Organization of the Petroleum Exporting Countries (OPEC) output cut.

Russia and OPEC members will meet in Vienna on Thursday to discuss an extension of the pact to curb output, possibly to the end of 2018.

The Sakhalin-1 project, operated by ExxonMobil off the coast of Sakhalin island in Russia's Far East, currently produces about 200,000 bpd.

"From January, total oil production from Sakhalin-1 and a small stream from Rosneft's separate block will be about 250,000 bpd," said one of the sources familiar with the matter.

A second source said production will increase to 260,000 bpd in the March quarter from about 190,000 bpd in 2017. A third source said output will rise to more than 250,000 bpd.

"Exxon is seeking permission to raise output under its development plan and is hopeful of getting it later in the year," said the first source.

In the meantime, the joint venture has opted to "front load" production and may cut it later if permission is not granted to keep the annual average intact, this source said.

India's ONGC Videsh recently for the first time issued three tenders for the sale of Sokol crude from Sakhalin-1 in a month.

OPEC, Russia and several other major producers have cut their combined output by about 1.8 million barrels per day since January to reduce bloated inventories and boost oil prices.

Moscow has said it was ready to support extending a deal. But its economy minister has also said the country's economy has been hurt by the deal as it has dampened investment.

Russia's oil-dependent economy grew an annual 1.8 percent in the September quarter, slowing from 2.5 percent in the second quarter.

US producers, which scaled back output with the price slump after mid-2014, have ramped up production as oil prices climbed.

Newspaper headline: Output from Sakhalin-1 set to rise

Posted in: MARKETS

blog comments powered by Disqus