Will Russia Be Able to Cut Its Output Before The Meeting in Doha?

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Doha is going to host a meeting of all the leading producers of oil in the world which includes Russia too. This meeting is going to be held on 17th April2016 and the main subject on the agenda of this meeting is anissue of freezing the oil outputs from all the oil fields around the world at the output level of oil in the month of January 2016.However, the recent development in the matter of oil output in Russia had put a question mark on its ability to adhere to these commitments of limiting the oil output.

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These question marks were raised due to the fact that the oil output of Russia has shown an increase after a period of 30 years. According to the information provided by the Energy Ministry, it is said that the production of oil has increased by 0.3 percent. The oil output of Russia is 46.149 million for the month of March whereas in the month of February it was 43.064 million. The oil output of Russia is 10.91bpd in the month of March. This increase was reported after a gap of almost 30 years when in the year 1987, the oil output from Russia had reached 11.47 bpd which was the record for Russia.

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Experts say that Russia may find it difficult to freeze their oil output if the decision is taken to that effect in the meeting to be held that Doha. The reason behind this difficulty is that the Russian economy and the local industries are majorly dependent on the oil companies like Lukoil, Gazprom, and Rosneft. All these companies are major oil producers in the country and each company tries to promote its own agenda.According to the reports, there was no comment from the Energy Ministry on the new development according to the provided data.

The increase in the oil output in Russia is the result of many small factors.The oil production was increased due to the increase in the production by the small oil companies which have recorded an increase of 1.5 percent. Another major contributor to the increase in the total oil output of Russia is the various joint ventures by oil companies of other countries. These foreign joint ventures have reported an increase of 11.9 percent. The output which is the result of various agreements based on output sharing also showed an increase. However, the major oil companies in Russia reported a decline in their oil output this month.

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The production of Natural Gas in Russia has also reported an increase when it recorded the production in the month of March at 53.98 billion cubic metres whereas the production in the month of February was 52.92 bcm.

The oil output by Rosneft was reported to be declined by one percent in the year 2015 and the company has planned to keep it that way in this year too. It seems that Rosneft was looking to lower its oil output in the next few years irrespective of the possibility of freeze output decision in the Doha meeting.

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