A deeply troubled global oil industry is cutting production but Russians are defying the trend. Goldman Sachs has forecast Russian crude production to rise to 11.7 million barrels per day (b/d) in 2018, which is an increase of almost 600,000 b/d from 2015.
“We remain positive on Russian oil industry production,” Goldman analysts led by Geydar Mamedov said. “At current oil prices, Russian oils are among the few global majors that can maintain their growth plans and dividends,” reports World Oil.
Goldman believes that the largest Russian producer Rosneft, which produces more than a third of the nation’s output, will be a major contributor to the increase in production. However, Rosneft’s output has been declining steadily and its current production is 3 percent below the peak achieved in late 2013. The giant Vankor field, which had boosted Rosneft’s production, has also declined by around 5 percent, from the highs of 447,000 b/d in the third quarter of 2015.
Goldman believes that new projects in Suzun, Tagul, Yurubcheno-Tokhomskoye and Messoyakha will be the major driver of growth. It expects oil from these new projects to push up overall output from 470,000 b/d in 2015 to 850,000 b/d in 2018, reports Bloomberg. However, the current available pipeline capacity is not adequate to transport the oil from the producers to the export network. So, new projects need to be matched by an expansion in the pipeline network.
Considering these challenges, the International Energy Agency expects Russian production to decline to 10.94 million b/d from 11.06 million b/d in 2016.
Read more: Why Goldman Sachs Remains Bullish On Russian Oil | OilPrice.com
“We remain positive on Russian oil industry production,” Goldman analysts led by Geydar Mamedov said. “At current oil prices, Russian oils are among the few global majors that can maintain their growth plans and dividends,” reports World Oil.
Goldman believes that the largest Russian producer Rosneft, which produces more than a third of the nation’s output, will be a major contributor to the increase in production. However, Rosneft’s output has been declining steadily and its current production is 3 percent below the peak achieved in late 2013. The giant Vankor field, which had boosted Rosneft’s production, has also declined by around 5 percent, from the highs of 447,000 b/d in the third quarter of 2015.
Goldman believes that new projects in Suzun, Tagul, Yurubcheno-Tokhomskoye and Messoyakha will be the major driver of growth. It expects oil from these new projects to push up overall output from 470,000 b/d in 2015 to 850,000 b/d in 2018, reports Bloomberg. However, the current available pipeline capacity is not adequate to transport the oil from the producers to the export network. So, new projects need to be matched by an expansion in the pipeline network.
Considering these challenges, the International Energy Agency expects Russian production to decline to 10.94 million b/d from 11.06 million b/d in 2016.
Read more: Why Goldman Sachs Remains Bullish On Russian Oil | OilPrice.com
