Russia’s Push for Oil and Gas Growth Stunted by Oversupplied Markets

Topics: Petroleum economics/production forecasting
Source: Irkutsk Oil.
Irkutsk has grown rapidly by maintaining drilling, even when prices dipped.

Russia has shown a remarkable ability to add oil and gas production in the face of daunting obstacles. It has aggressively expanded in Asia, by rapidly adding production in east Siberia, as it builds pipelines to China and a liquefied natural gas (LNG) facility deep in the Arctic.

A panel of eight leaders from the Russian oil and gas business recently offered an impressive growth story in the face of international trade sanctions and oil prices that sunk into the USD‑30/bbl range year ago. 

“I have an impression there is a kind of positive mood,” said Alexander Novak, Minister of Energy of the Russian Federation, at a panel session at the IHS Markit CERAWeek conference in Houston. “Prices are becoming stable, more predictable,” he said, but added “there is uncertainty about what comes next.”

As Novak was talking about how the oil-and-gas-driven Russian economy is growing again after a 2-year downturn, oil markets remain weak due to rising US unconventional oil ­production and lingering high inventories.

The upbeat feeling mentioned by Novak was largely the product of a deal between OPEC and major producers, particularly Russia, to reduce their output.

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Russia’s Push for Oil and Gas Growth Stunted by Oversupplied Markets

Stephen Rassenfoss, JPT Emerging Technology Senior Editor

01 May 2017

Volume: 69 | Issue: 5