Reuters reported that Russia pumped 10.26 million barrels per day of crude oil in July matching a post Soviet high recorded in May and retaining the title of top producer as its closest rival, Saudi Arabia rapidly closes the gap.
Russia also pumped 10.26 million barrels per day in October 2011. The June rate was 10.2 million barrels per day. By comparison, Saudi Arabia pumped as much as 9.8 million barrels per day in June an increase of as much as 900,000 barrels per day in response to the loss of Libyan supply after it failed to persuade OPEC of the need for a coordinated increase.
But while the kingdom had the spare capacity to ramp up production by nearly 10% in a month, Russia's top oil companies are struggling to grow by just a few percent a year.
Top Russian producer Rosneft said that it hit a record 2.4 million barrels per day in July with an increase in output at its new Vankor field and extra drilling at its biggest unit, Yugansk, accelerating its current growth rate to 1.5% to 2%.
Russia's Soviet era oil heartland is on the decline, and the government is working to provide incentives to coax capital intensive new fields on line and staunch the declines.
Mr Igor Sechin deputy PM of Russia said that country’s oil tsar has pitched the case for multi billion dollar foreign investment in harsh, remote new oil provinces as a means to guarantee supply during times of shock. Natural gas output stood at 48.40 billion cubic meters down from 50.67 billion cubic meters in June, a fall of 7.6% on a daily basis.
The decline is probably seasonal, but analysts are watching to see whether export customers who buy from Gazprom will reduce offtake in the H2 when the price they pay under Gazprom's oil linked long term contracts is set to rise sharply.
