Russian oil output climbs in line with OPEC quota deal

By Dina Khrennikova on 9/14/2021

MOSCOW (Bloomberg) --Russia’s crude oil and condensate output jumped in the first weeks of September as some of the nation’s key producers ramped up in line with the OPEC+ deal and Gazprom PJSC recovered from a fire at a facility in West Siberia.

The nation pumped an average of 1,456.9 thousand tons of oil per day between September 1 and 13, according to data from the Energy Ministry’s CDU-TEK unit seen by Bloomberg. That equals 10.679 million barrels per day, based on a 7.33 barrel-per-ton conversion ratio, which is 2.4% above August’s level.

If that rate of production is maintained for the whole of September, it would be the biggest monthly increase in Russian production in just over a year. The country’s output on September 13 rose to 10.72 million barrels, indicating the full-month average may be higher than in the first weeks.

The gain was mainly driven by a 13.9% hike in production at Rosneft PJSC’s Bashneft unit and an 11.9% increase in the output of smaller oil producers, which include Gazprom.

The Organization of Petroleum Exporting Countries and its allies agreed to boost their production from August in response to growing global energy demand. While the alliance seeks to add 400,000 barrels a day to the market each month, concerns have mounted recently about whether some members of the group are able to meet their targets. Russia’s share of the increases is some 100,000 barrels a day.

In August and September, the extra supply from OPEC and its allies will be offset entirely by output disruptions elsewhere, the International Energy Agency said on Tuesday. Global production should start growing again in October, it said.

The CDU-TEK statistics do not give a breakdown between production of crude and a light oil called condensate, making it difficult to pinpoint which variety is driving growth. The data suggest the hike may be partly attributable to a recovery in condensate, given the output increase among producers that include Gazprom.

On August 5 to 6, Gazprom’s processing facility near Novy Urengoy was damaged by a fire, forcing the producer to cap its regional output of natural gas and condensate. As of Tuesday, the company’s gas deliveries to Europe via the Yamal pipeline increased to the highest level since the end of July, indicating that the producer has been gradually bringing back production in that area.

Gazprom’s press office did not respond to a request for comment on the production recovery, nor on the pace of repairs at the Novy Urengoy plant.

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