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Russian oil production reaches record high

Despite its participation in the OPEC-led production cuts, Russia has achieved a new post-Soviet high for oil production.

Reuters is reporting data from the Russian Energy Ministry that has Russian production of crude oil and condensates averaging 11.25 bpd (barrels per day) over 2019, up from the 11.16 bpd record set in 2018.

Growth in the Russian oil sector has been limited not just by the OPEC-led deal but also sanctions that limit technology transfers for exploration and production in deep-water, arctic, or shale projects. For example, ExxonMobil, the oil major behind Mobil gear oil and other lubricants, abandoned its joint exploration projects with Rosneft in 2018.

Despite this and the crises caused by tainted oil in 2019, Russian production has increased thanks to new technologies being used at mature fields, and new fields coming online. While the new record high would seem to suggest that the country is not complying with its production quota, it should be noted that this also includes condensate production, which is usually an inevitable byproduct of natural gas production. At the latest OPEC meeting, Russia agreed to a further 70,000 cut in its quota for crude oil but gained the concession of no longer including condensate production within it. While separate figures are not currently available, this likely puts the country back into compliance.

According to Reuters, Alexander Novak, the Russian Energy Minister, says he now expects Russian combined crude oil and condensate production of about 11.12-11.32 million bpd this year.

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