Russia oil production is less than the country's CDU (Central Dispatch Unit), the production-export monitoring agency of the Energy Ministry, says and now Saudi production is greater, according to JODI (Joint Organization Data Initiative). The report notes that Russian production fell from 10.370mn barrels per day in December to 9.920mn in March, marginally less than Saudi Arabia's 9.923mn barrels per day that month.
But the Energy Ministry's data showed daily average output was steady at about 10.33mn barrels per day in early 2012, up from 10.31mn barrels in December.
JODI is supervised by the Riyadh-based International Energy Forum, according to Bloomberg. “I’m confused by these Russian figures that JODI has published,” Julian Lee, senior energy analyst at the Centre for Global Energy Studies (CGES) in London, told New Europe on 24 May. “I really don’t understand where these Russian numbers are coming from that show Russian oil production falling below 10mn barrels per day. It doesn’t sort of gel with any other figures that I have seen from any source for Russia,” Lee added.
Chris Weafer, chief strategist at Moscow’s Troika Dialogue, said Russia's CDU has been very consistent with its methodology for the past ten years at least. Moreover, the data published by CDU has always tied up almost exactly barrel for barrel with the data separately published by Russia's oil producing companies, by Transneft, the refiners and by the export terminals.
OPEC-member Saudi Arabia has criticised non-member Russia for capitalising on high oil prices and exporting as much as it can. “The Saudi's never really forgave Russia for making no effort to support OPEC's efforts to prop the oil price in 1999 or in 2008/'09. The accuse Russia of taking advantage of OPEC, ie mainly Saudi actions to support oil,” Weafer said.
He added, “This report [reportedly by the Saudi-funded initiative] is trying to raise doubts about Russia's sustainable production as part of efforts to keep an oil risk premium in place, i.e. to caste doubts about future supply from traditional sources at a time when new sources and new energy is becoming available”.
Nevertheless, Lee noted that Saudi production is certainly rising and the CGES has accessed April Saudi production at about 9.96mn barrels a day.
The CGES analyst noted that Riyadh has effectively for a long time taken a political decision to limit the volume of its oil production. “The general view is that if Saudi Arabia wished to do so within the space of three months or so it could lift its production to close to 12mn barrels per day. Now Russia couldn’t do that. Russia, if we take the Energy Ministry’s figures at face value, Russia is producing somewhere 10.2 and 10.3mn barrels a day but it can’t increase that quickly because the only way Russia can increase its production is to drill more wells and develop more fields and offset the decline in Siberia whereas Saudi Arabia has got that capacity already installed that it can bring into operation very quickly,” Lee said. “I don’t think that capacity is really limited by Saudi Arabia’s reserves; it’s limited by the decisions taken by the Kingdom, by the government, and by the state oil company.”
Source: New Europe Online