Oil production to grow 2% annually, writes Martyn Wingrove,
Published: Nov 20, 2006
RUSSIAN oil production is on schedule to grow 2% annually for several years as the state pipeline owner Transneft prepares to build more trunk lines, writes Martyn Wingrove.
The world’s second largest oil exporter wants to keep its position by opening up new routes such as the trunk pipeline to the Pacific Ocean over the next five to 10 years.
Russian finance minister Alexei Kudrin told bankers in Melbourne that his government was cutting taxes to attract more investment in the onshore oilfields where production had rapidly declined.
‘Russia is going to increase oil production, we expect by 2% annually,’ he said at an Australian conference. ‘We are going to continue the construction of pipelines because without an efficient network of pipelines the production growth would be inefficient.’
Mr Kudrin thinks investment in the oilfields is rising with more private money being deployed.
But analysts believe the 2% growth is lower than in previous years as a consequence of government interference that includes moves against oil majors Shell, Total and BP to hinder development projects and the destruction of Yukos for the benefit of Rosneft.
Mr Kudrin said the government did not intend to monopolise the industry by giving state groups Gazprom and Rosneft more control over natural resources.
Russia produces around 9.7m barrels a day, making it the world’s number one ahead of Saudi Arabia, but it has a large domestic consumption so its exports are below 5m barrels a day.
Russian oil exports fell in October after world prices dropped to $60 a barrel and the government raised export duties to record levels.
Average daily oil output last month was at 9.7m barrels, down 0.4% from 9.75m bpd in September, while exports dropped 9.4% to 4.94m bpd.
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