Foreign-Owned Projects Boost Russian Oil Output in Sept

Reuters

MOSCOW, Oct 2 (Reuters) - Foreign-led projects lifted Russian oil output last month to within reach of a post-Soviet record, showing the potential in the country's existing fields, which are largely unaffected by Western sanctions over Ukraine.

Output of oil and gas condensate in the world's largest producer rose 0.9 percent to 10.61 million barrels per day (bpd) last month from August, a touch under the post-Soviet record-high of 10.63 million bpd reached in December, Energy Ministry data showed on Thursday.

Oil production rose in January-September by 0.7 percent year-on-year, showing that Moscow has not curbed its output to prop up the oil price, which reached a 27-month low under $93 per barrel on Thursday, due to weak demand in China in Europe.

A price below $100 marks the pain threshold for Russia's faltering economy. Russia's central bank said on Wednesday it is working on measures to support the sanctions-hit economy should oil prices fall by as much as a third or more.

The United States and European Union have imposed wide-ranging sanctions on Moscow for its role in the Ukraine crisis, including freezing access to foreign technology and banning Western firms from cooperating in Arctic, shale and deep-water drilling. This targets mostly future oil output.

However, Russia provides around a third of the European Union's oil and gas, and many governments in the bloc are wary of antagonising Russia further.

"It is unlikely that we'll see any impact on Russian oil production from the sanctions by the year-end," Alexander Kornilov from Alfa bank said, although that could change if new sanctions are applied next year.


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