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Russia oil and gas news roundup

Given Russia's economic reliance on energy exports, any development in the country's oil and gas markets is of huge significance. 

Recent weeks have seen the country step up its European gas exports and be named the biggest producer of oil in the world. Read on for all the latest news from Russia's energy sector:

US figures show Russia is now world's biggest oil producer

Russia has overtaken Saudi Arabia and the US to become the world's largest oil-producing state, according to new figures for 2014 published by the US government.

The US Energy Information Administration revealed that Russia's average production throughout last year stood at around ten million barrels per day, with 4.75 million barrels per day being exported. 

Countries in Asia and Europe accounted for the vast majority - more than 98 per cent - of all Russian crude oil exports. Some 26 per cent of exports went to the Asian market, while 72 per cent was delivered to countries in Europe, which depends on Russia for around a third of its total oil supply.

Russia's economy is heavily dependent on energy exports. In 2013, 68 per cent of the country's total export value was made up of oil and natural gas revenues.

Rosneft bucks global trend and increases oil drilling

While energy companies across the world have cut back on drilling operations in recent months, the opposite has happened at Rosneft.

The world's largest producer of traded oil increased drilling by more than a quarter in the first seven months of 2015.

More than 800 new wells were drilled during the opening half of the year, with the total depth drilled climbing to 4.59 million metres from 3.61 million metres at the corresponding point 12 months earlier.

Experts see no signs that Russian production is likely to drop back at any point in the near future.

Ronald Smith, an oil and gas analyst for Citigroup, told Bloomberg: "We don't see a financial reason for Russian production to start falling. If anyone was out there expecting Russia to balance the market, the signal is that's not going to happen."

Alfa Bank oil analyst Alexander Kornilov added that Rosneft "needs to drill actively in order to withstand falling production".

Russia and Algeria to expand oil and gas cooperation

Algeria and Russia have pledged to work together more closely on energy projects.

Companies from the two countries are already cooperating on a limited number of oil and gas projects, but the partners have now agreed to expand this collaboration.

Russian energy minister Alexander Novak said a number of Russia's major oil and gas producers - including Gazprom Neft, Lukoil, Rosneft and Bashneft - are interested in entering the Algerian market in future.

According to energy and metals news agency Platts, Novak added that the two countries have "great potential to expand collaboration in various sectors of the economy, including oil and gas, agriculture and transportation".

Russian gas exports to Europe hit all-time high

July saw Russian gas exports to Europe climb to their highest ever level as European nations sought to cash in on a sharp drop in prices.

Gazprom, which holds a monopoly on Russian gas exports, revealed earlier this month that it exported 14.29 billion cubic metres of natural gas to Europe and Turkey in July, up from 11.66 billion cubic metres a year earlier.

"This is an all-time high level for July and a biggest monthly level for the last year-and-a-half," the company was quoted by Reuters as saying. 

Furthermore, Gazprom is hoping to boost gas sales later this year when it holds its first ever auction to increase exports to countries in north-west Europe.

Austria's OMV wants to increase Russian collaboration

International oil and gas company OMV is eager to expand collaboration with Gazprom.

Speaking to Russian daily newspaper Vedomosti, new OMV chief executive Rainer Seele said his priorities in working with the state-owned natural gas extractor would include the construction of two new gas pipelines running via the Baltic Sea to Germany.

Among the other areas of focus would be a number of asset swaps, potentially incorporating the development of deep-lying deposits in Siberia.

Furthermore, the two companies could team up on foreign joint projects, such as ventures with Gazprom Neft, Gazprom's oil arm.

Seele argued that Europe has little choice but to continue importing Russian gas, despite sanctions levelled on Russia by the EU.

"I don't see any short or long-term alternatives. This should be decided by companies that import gas, not by politicians," he was quoted by Reuters as saying.


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