Russia's July Oil Output Falls, Seasonal Factors Blamed

Reuters

MOSCOW, Aug 2 (Reuters) – Oil output from Russia, the world's biggest producer, fell 1 percent in July from the month before, hit by lower production at Gazprom and a drop in output from projects with foreign partners, data from the Energy Ministry showed.

The decline could be a worrying sign for Russia, as it needs to grow production to maintain its share of supplies to Europe and ramp up output to China.

Despite the fall, Russian output was still above Saudi Arabia's 9.65 million barrels per day (bpd).

The decline in production to 10.43 million bpd in July from a post-Soviet high of 10.53 million bpd in June, was mainly due to seasonal factors, with a 17 percent fall in condensate production by Gazprom, analysts said.

Condensate, which can be transformed into gasoline or diesel among other products and is usually extracted along with natural gas, accounts for around 4 percent of Russia's total oil output. Natural gas production falls in the summer due to weak demand.

"In July 2012, there was the same result - a decrease of 10 percent (in Gazprom's condensate output)," said Andrey Polischuk, an analyst with Raiffeisen bank.

Another reason for the fall might be that several units at Gazprom's Surgut gas condensate stabilisation plant were under maintenance in July, the Energy Ministry's data showed.


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