Russia last month pumped below its OPEC+ oil-output target for the first time since the historic curbs began last May, failing to take full advantage of a more generous quota. The nation produced 38.56 million tons of crude and condensate in February, according to preliminary data from the Energy Ministry’s CDU-TEK unit. That equates to 10.095 million barrels a day, based on a 7.33 barrel-per-ton conversion ratio.
Output of condensate — a light oil extracted from natural gas — is excluded from the OPEC+ deal. As the CDU-TEK doesn’t provide a breakdown between crude and condensate, it’s difficult to assess the nation’s compliance, but if February’s condensate production was in line with January’s, then daily crude output would be around 9.155 million barrels, some 30,000 barrels lower than its OPEC+ quota.
Unplanned Drop
Russia reduced oil output despite OPEC+ quota increase amid cold spell
Source: Bloomberg calculations based on the Energy Ministry’s CDU-TEK monthly data
Russia and close oil ally Kazakhstan were allowed to produce more in February and March under the deal reached between the Organization of Petroleum Exporting Countries and its partners. Russia’s quota rose by 65,000 barrels a day in February, and will do so again this month. Other OPEC+ members kept output flat, while Saudi Arabia voluntarily slashed an extra 1 million barrels a day. OPEC+ meets again this week to discuss production levels beyond March.
The last time a severe winter led to cuts in Russian oil production was early 2017, at the start of the country’s cooperation with OPEC. In early January that year, the cold spell resulted in output reductions averaging 5,000 to 10,000 barrels a day, according to Energy Ministry estimates.
Bashneft PJSC, a unit of Russia’s largest oil producer Rosneft PJSC, suffered the biggest drop in output last month, with its average daily production falling 18% from January to about 191,098 barrels of crude and condensate, according to Bloomberg calculations. Slavneft, owned by Rosneft and Gazprom Neft PJSC, reduced daily output by 2.3% to around 143,470 barrels.
Rosneft didn’t respond to a request for a comment. The producer, excluding Bashneft and Slavneft, cut its daily production by 1.3% to 3.404 million barrels, while other oil companies, including Lukoil PJSC, Surgutneftegas PJSC, Tatneft PJSC and Gazprom Neft, increased their average daily output. Projects operating under production-sharing agreements, including with international partners such as Exxon Mobil Corp., reined in output by 3.5% to around 360,678 barrels a day.