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Russian-state controlled O&G Rosneft to chase production growth

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Today, Russian state-controlled Rosneft announced it resumed chasing oil and gas production growth. Indeed, this decision comes as the company noted “positive trends” on global energy markets and by the Opec+ deal relaxation.

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Further comments

In this regard, Rosneft’s first vice president Didier Casimiro said today; “Indeed, the recent trends in physical supply balances and energy prices underpin our drive; specifically, to increase investment and production.”

Casimiro also said that it is successfully implementing large projects for the development of new fields Vostok Oil, Rospan, Kharampur and others. Thus, “creating the basis for future growth,” added the first vice president.

Rosneft and its oil output results throughout the year

Worth noting, Rosneft recently pledged to reduce its carbon intensity by 2035. Besides, it is allocating up to 90pc of its capital expenditure (capex) towards upstream projects.

Moreover, the company’s main focus is the development of Vostok Oil in Russia’s far north. Indeed, Rosneft projects the asset to come on stream in 2024 and to reach production of 600,000 b/d.

Indeed, Rosneft’s spare crude production capacity was 25,000 t/d (182,500 b/d) at the end of the second quarter. Thus, and according to energy media website, Argus Media, such results suggest that it could be fully utilized by the end of this year.

Accordingly, management said that Rosneft increased output at its most efficient assets in western Siberia and the Volga-Urals region in the quarter. Consequently, that allowed it deliver 5.1pc quarter-on-quarter crude production growth to 3.89mn b/d.

More projects

Thus far, during the first six months of 2021, Rosneft also increased the share of greenfield projects in its overall output by 23pc year on year, to 485,000 b/d. Particularly, these projects include East Messoyakh, Kuyumbinskoye, Yurubcheno-Tokhomskoye, Kondinskoye, Russkoye, Srednebotuobinskoye, the Erginsky hub, Severo-Danilovskoye and the Rospan project.

Noteworthy, the Company underscored that the former two fields are developed in partnership with state-controlled Gazpromneft.

More recently, Rosneft increased capex by 5.3pc quarter on quarter, to 237bn roubles ($3.22bn). Thus, capex in the first six months of this year was up by 25pc year on year at Rbs462bn, with higher spending at Vostok Oil.

Finally, Rosneft’s upstream operating costs did not change in the second quarter from the first three months of the year at $2.6/boe.

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