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Russian oil production hits 11-month high in March

Russia’s oil production increased slightly in March for the first time since April last year. It reached an average of 10.97 million barrels per day (bpd), a little above its agreed limit of 10.947 million bpd as part of the OPEC-led production cuts.

Despite the rise, Russia’s energy minister, Alexander Novak, reaffirmed in a statement the country’s commitment to rebalancing the oil market. He also said:

“Russia reached the production cuts compliance (with the OPEC deal) of 93.4 percent. The fluctuations of the liquid hydrocarbons in March were due to a high demand for gas and seasonality on the domestic market.”

Russia and some other non-OPEC countries joined forces with OPEC in January 2017 to cut supplies in an attempt to restore global inventories to preferred levels. The deal is set to expire at the end of the year, but Russia says it is discussing a variety of options for longer-term cooperation in the global oil markets.

While production rose, output from production sharing agreements was 0.6% lower in March due to a delay in planned production increases from the Sakhalin-1 project. ExxonMobil, the oil giant behind Mobil UK distributors, leads the Sakhalin-1 project, which has consistently set new drilling records. By using extended-reach drilling to create wells over 11 km long, the operator, Exxon Neftegas Ltd., can use its onshore Yastreb rig to extract oil from the Chayvo and Orland offshore fields east of Sakhalin island in Russia’s far east. The offshore Orlan platform, meanwhile, was built to withstand the harsh conditions around Sakhalin island.

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