Rise in Russian Oil Output Supports Overstretched Budget

Russian output likely stayed above that of Saudi Arabia, which kept production steady at around 9.7 million bpd in October and November. Saudi data for December is not yet available.

Almost all large Russian oil firms increased output in 2013 as they boosted drilling, including Lukoil, Russia's second-largest oil producer and top non-state oil company, which had logged declines in the previous three years.

State-controlled Rosneft, the world's top listed oil producer, posted a dramatic jump in output to 3.1 million bpd thanks to the acquisition of rival TNK-BP and production increases in East Siberia.

The year was also marked by a further diversion of Russian oil to China, away from saturated European markets, as eastbound flows rose by almost a fifth to 740,000 bpd.

As Russia agreed to increase deliveries further to China in coming years, the Asian giant will likely replace Germany as the largest customer for Russian pipeline oil in the first quarter of 2014.

Despite the jump in eastbound flows, Russian oil exports outside the former Soviet Union fell by around 2.5 percent to 4.53 million bpd as Russia ramped up oil refining.

Domestic refining rose by 180,000 bpd, reflecting the country's $55 billion programme launched in 2011 to modernise its refineries and encourage exports of high-quality oil products.

Gazprom, the world's top gas producer, saw its output slip to 1.30 billion cubic metres (bcm) per day from 1.31 bcm per day in 2012 although its exports to Europe jumped 16 percent to a record 161.5 billion cubic metres.


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