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UPDATE 2-Rosneft, foreign-led firms boost Russian oil output to post-Soviet record

Mon, 02nd Dec 2013 10:08

* Russia's oil output rises to 10.61 mln bpd in Nov from10.59 mln bpd in Oct

* Gas production falls 4 pct to 1.93 bcm

* Next year's oil output in Russia seen up around 0.5 pct

MOSCOW, Dec 2 (Reuters) - Increased production at Rosneft and foreign-led projects sent overall Russian oiloutput, the world's largest, to a post-Soviet record high of10.61 million barrels per day in November, Energy Ministry datashowed on Monday.

In tonnes, crude production was 43.44 million for the month.

Russian companies have been increasing their oil output toexploit high global crude prices and thanks to governmentmeasures, including tax breaks for crude oil extraction atremote and challenging provinces.

The launch of the East Siberia-Pacific Ocean pipeline, aswell as Rosneft's drive to more than triple oil exports to Chinafrom the current 300,000 barrels per day, also benefited oilproduction in the country.

In October, Russia's oil production stood at 10.59 millionbpd.

November's production was more than the 9.7 million bpdpumped by the world's top oil exporter, Saudi Arabia, whencombined crude output at the Organization of the PetroleumExporting Countries dropped to its lowest since May 2011.

The data showed that the world's top listed oil producerRosneft increased oil production by 0.5 percent to3.89 million bpd.

PSA DRIVE

Oil output under production sharing agreements (PSA),designed in the 1990s to encourage investment by foreign oilcompanies, jumped by 11 percent in November to almost 1.3million tonnes (317,000 bpd).

"Russia's oil output hit a record for the second time in arow, and it was all due to the continuation of production growthat PSA projects," Denis Borisov, director at Ernst & Young's oiland gas centre in Moscow, said.

He added that Rosneft's growth was mainly due toconsolidation of a recently acquired firm in East Siberia.

PSA projects include Sakhalin-1, which involves Rosneft,ExxonMobil, ONGC and Sodeco; Sakhalin-2 involvingGazprom, Shell, Mitsui, and Mitsubishi; and Kharyagawith Total, Statoil and Zarubezhneft.

The ministry did not provide a breakdown by project.

Sales from Russian oil and gas account for over a half ofthe state budget revenues and the state considers the sectors as"strategic" for its economy. The government aims to at leastmaintain oil production at 10 million bpd this decade.

Borisov forecast a 0.5 percent growth in Russian oil outputnext year thanks to production at new fields in East Siberia,Caspian Sea and, particularly, Novoportovskoye oilfield in Yamalregion.

Natural gas production declined by 4 percent to 1.93 billioncubic metres a day in November, the data showed. Last month,Ukraine halted Russian gas imports for almost a week.

Gazprom's output fell by 8 percent to 1.37 bcm per day,while gas production at Novatek, Russia's topnon-state gas company, stayed broadly flat, at almost 0.15 bcmper day.

The data shows only Novatek's core production units' output.

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