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Bloomberg: Russian Oil Output Growth Forecast Cut by Renaissance

By Torrey Clark

Nov. 22 (Bloomberg) — Russia’s oil output growth may slow to 2.4 percent this year amid government threats to halt work at Royal Dutch Shell Plc’s Sakhalin-2 project, before picking up next year, Renaissance Capital said in a report today.

Output in Russia, the world’s second-largest oil exporter, slid 0.4 percent in October from September as the price for Urals crude fell from a record in August and the government increased pressure on foreign-led projects, such as Shell’s $22 billion Sakhalin-2, to cede some control to state-run companies OAO Gazprom and OAO Rosneft.

Russia produced 9.44 million barrels a day last year, a record in post-Soviet Russia.

“Given the troubles plaguing the Sakhalin projects and the lack of growth outside of Rosneft, we have taken a knife to our figures yet again,” analysts Adam Landes, Roman Elagin and Elena Savchik wrote in a report today. They previously cut their forecast to 2.7 percent from 3.3 percent growth after September output slowed.

Russian Finance Minister Alexei Kudrin said Nov. 17 the country expects annual output growth of about 2 percent in the coming years.

Growth should accelerate in the coming years as the fields companies are investing more, the analysts said.

To contact the reporter on this story: Torrey Clark in Moscow at [email protected] .

Last Updated: November 22, 2006 05:12 EST

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