Russian oil production fell in February; gas production stabilizes
According to CDU TEK data, Russian oil production (including gas condensate) 0.6% m-o-m vs +1% growth in January. Output declined despite the potential opportunity to increase it under the January OPEC+ agreement by 65 tbd (thousand barrels/day). Production decreased roughly by about the same amount. Severe weather conditions hit February production in Siberia and Volga region. It also reflects technical difficulties bringing back wells shut off in spring and summer of 2020. It's easier to suspend the well than to return it to the same production levels. One month is not enough to get the picture but coming months, whether it's a significant problem. Chart 1. Oil production and exports of crude, Jan 2018 - Feb 2021Source: Rosstat, CDU TEKWe note another change in February production data. Rosneft declined its output by ~300 tbd while NNK increased it by ~110 tbd. We believe that this dynamic is partially explained by the assets swap which occurred in late 2020. Rosneft bought 100% of Taimyrneftegaz (license holder of Payakhskoye and Irkinskoye fields) for the cash payment + some of its smaller production assets. The change of ownership was reflected in February production data. Chart 2. Natural gas production in Russia, 2019-2021Source: Rosstat, CDU TEKAccording to CDU TEK data, gas production in Russia in February amounted to 62.04 bcm (+ 3% yoy) versus +7.9% in January. So the effect of colder weather and increased supplies both for exports and domestic needs gradually dissipated. So you can not extrapolate higher growth of early 2021 later into the year. We expect gas production to increase by 3.1% in 2021.