Spring exacerbation

Oil workers break records

A new record for oil production has been set in Russia. According to the Ministry of Energy, in March the daily production volume amounted to 10.12 million barrels, which is 0.4% more than in February, when another record figure was recorded. Oil companies achieved this result thanks to government-initiated tax incentives for fields in Eastern Siberia, experts say.

The oil industry recovered quite quickly from the consequences of the global financial crisis. The production target (10 million barrels per day) was reached back in September last year. This was the highest figure in the last 19 years - 10 million barrels per day were produced by the Soviet oil industry. Let us recall that since 1991, stagnation began in the industry - the average level of oil production was 9.2 million barrels per day, i.e. About 40 million tons were mined per year. In 1996, even less was produced - 301 million tons, and the daily production level was 6 million barrels. This figure remained at approximately the same level until 2001, when a sharp increase in production volumes began. Already in 2005, 458 million tons were produced. Last year production amounted to 488 million tons.

Over the three months of this year, oil production increased by 3%. According to Troika Dialog analyst Valery Nesterov, production growth is currently ensured by five largest projects in the industry: Yuzhnaya Khylchuya, which is being developed by LUKOIL, Talakan, where Surgutneftegaz operates, and Vankor, for which it holds a license Rosneft, the Verkhnechonskoye field of Rosneft and TNK-BP and the Uvat group of TNK-BP. In addition, according to the analyst, positive results can also be achieved at a number of old fields. Thus, this year TNK-BP managed to increase production at its Orenburg project, and Gazprom Neft - in Yugra.

At the moment, there are all the prerequisites to set another record and increase production by the end of the current year to 500 million tons - the government set this bar two years ago. However, the White House is in no hurry to make assessments. According to the official forecast of the Ministry of Energy, production in 2010 should remain at last year’s level. “Nevertheless, taking into account current indicators, the oil industry may well reach the coveted figure of 500 million tons,” Mr. Nesterov believes. The key point, in particular, may be production at Vankor. Rosneft has already increased its forecast for oil production at this field several times. However, companies should not forget about traditional regions. Mr. Nesterov estimates that over the past few months, production in Western Siberia has decreased by 2.3%. At the same time, there are a number of projects where this figure is 5%. “In light of this, the government needs to continue to pursue stimulating tax policies. Now, as you know, at the instigation of the Ministry of Finance, the possibility of abolishing the zero export duty for fields in Eastern Siberia is being discussed. They gave benefits with one hand, and now they want to take them away with the other. For oil workers, this will be a very sensitive blow, then there will be no record,” Mr. Nesterov believes.

Close to the upper limit

During Friday trading on the New York stock exchange, the price of a barrel of WTI oil broke through the 85-dollar mark. In one session, the price of a barrel increased by $1.44 and reached $85.20. The successes of the North Sea mixture were more modest. On the London Stock Exchange, the increase in Brent was $1.34, and by the close of trading a barrel of oil was $84.04. The last time commodity prices were so high was in October 2008. Let us recall that by the end of December of the same year, the price of oil dropped to $30. However, since then, against the backdrop of optimistic expectations of a global economic recovery, continued demand from China and the machinations of speculators, the price of “black gold” has almost tripled. This gives some Western analysts reason to predict that the $100 mark will be broken in the summer. However, as experts interviewed by Vremya Novostey note, the emerging growth in the commodity market is not so intense. “According to technical analysis, we are close to the upper limit, which is at about $87 per barrel. At moments, the price, of course, can jump higher, but the growth will be followed by a fall,” said FxPro analyst Alexander Kuptsikevich. According to him, the pullback may be associated with the publication of economic results for the first quarter, which will inevitably be followed by a slowdown in the upward movement, and more likely even a rollback to the 75-dollar mark. "TIME FOR NEWS"

Kirill MELNIKOV