Russian oil producers are ready and willing to expand output beyond the 200,000 b/d implicit in Russia’s recent agreement to relax production limits, according to ESAI Energy. Between new projects and mature fields where producers have made cuts to cap production, producers have more than 500,000 b/d of spare capacity.
According to ESAI Energy’s CIS Watch, there are nine projects that alone have 360,000 b/d of spare capacity. These nine projects span East Siberian fields operated by Rosneft, West Arctic fields being developed by Gazprom Neft and Lukoil’s Caspian fields, among others. For example, now that the third of the Vankor cluster’s fields, Tagulskoe, is ramping up output, Rosneft has the option of raising output there. Meanwhile, Rosneft and Slavneft are preparing to ramp up production at the neighboring Yurubcheno-Tokhoskoe and Kuyumba fields, for which a special pipeline has been built to connect this new supply to the ESPO Pipeline. Separately, a comparison of current and recent production rates at selected mature fields reveals at least another 160,000 b/d of spare capacity. This means a potential increase of more than 500,000 b/d.
“In some cases, producers are already ramping up production, creating the momentum for higher production that was already evident in June, when there was a 96,000 b/d month-on-month increase in output,” comments ESAI Energy Principal Andrew Reed. “In response to production losses and uncertainty in other key countries, the Arab Gulf will not be the only region to provide more crude when and if Iranian exports fall.”