Russian oil production was slighly up in November, ahead of OPEC+ meeting; gas production was down to lower European demand

RUSSIA ENERGY / FINANCE - In Brief 02 Dec 2020 by Marcel Salikhov
According to the most recent CDU TEK data, Russian oil production (including gas condensate) was 10 mbd. Oil production slightly inched compared to October 2020 levels (+0.3% m-o-m) was lower 1.3 mbd in than year ago or -11% compared to March 2020.Chart 1. Russian oil production (including gas condensate), 2019-2020Russia maintains a relatively high level of compliance with its target under OPEC+ but increased its production by 0.1-0.2 mbd over the last months despite a constant target for OPEC+. Russia's official data is calculated in tons and includes gas condensate. So it can be debatable what's the 'correct' way to convert it to crude production for OPEC+ liabilities. Among Russian oil companies, Slavneft and Bashneft are the most heavily hit. Both companies decreased their output roughly by 50% compared to March. Gazpromneft is the most violator as the company reduced its production only by 4% compared to March. Lukoil and Surgutneftegaz reduced by 14%, Rosneft (incl Bashneft) - by 16%. Chart 2. Russian gas production, 2015-2020 Russian gas production decreased by 2.2% y-o-y to 62.7 bcm in November after a brief annual growth in October (+1.1% y-o-y). In 11M20 gas production is down by 6.9% y-o-y. Russian gas exports were hammered in 1H20 due to a plunge in European demand and relatively high prices compared to available alternatives. European gas prices soared in 3Q20 and it helped to restore Russian gas supplies to Europe. At the same time, the second wave of lockdowns probably negatively affected November supplies.

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