Russian Oil Output Hits 18-Month Low - 9.72 MBD - Bloomberg

[hatrack]

May 2 (Bloomberg) -- Russia, the world's second-largest oil supplier, produced the least amount of crude in 18 months in April as aging fields and rising costs threaten the country with the first annual decline in oil output in a decade. Production dropped to 9.72 million barrels a day (39.8 million metric tons a month), 0.8 percent less than in April last year and only slightly higher than in October 2006, according to data released today by CDU TEK, the dispatch center for the Energy Ministry. Compared with March, output fell 0.4 percent.

Russia's output may have peaked as producers struggle with aging fields, rising costs and increasingly remote new deposits, Moscow-based OAO Lukoil and OAO TNK-BP, the country's two- biggest independent oil companies, said in April. The finance and energy ministries are working on tax-cut proposals by July to stimulate investment.

Exports through OAO Transneft, the state oil-pipeline operator, increased 6.7 percent from March to 4.5 million barrels a day. Russia increased the crude export tax to a record $340.10 a metric ton ($46.53 a barrel) on April 1 and plans to raise the levy again as of June 1. Exports dropped 3.8 percent compared with April last year.

Production from Lukoil, OAO Surgutneftegaz and Exxon Mobil Corp.'s Sakhalin-1 project continued to decline. State-run OAO Rosneft, which boosted output by about a third after buying bankrupt OAO Yukos Oil Co.'s assets last year, produced 2.29 million barrels of oil, 0.3 percent more than in March.

EDIT

http://www.bloomberg.com/apps/news?pid=20601013&sid=aJGP_74f8HBE&refer=emergingmarkets

[Zachstar]

1. There seems to be reports of falling production all over the place.

And yet china and other nations continue to grow. So oil hitting 200 before the decade is out is likely in my view.

[kristopher]

2. We finally agee.

But I'd want to throw in the caveat that if we announce a irrevocable commitment to transition our economy (including personal transportation) to renewables then the upward pricing pressure will be strongly affected.

Added on edit: I'd also disagree on "falling production all over the place". That has been going on since we started taking oil in Pennsylvania.

[GliderGuider]

3. An "irrevocable" political commitment???

Don't bogart that joint, my friend...

[kristopher]

4. Its a reasonable statement

There are policy measures that would cause so much money to flow into renewables infrastructure that walking away from the investment becomes, for all practical purposes, impossible.

[GliderGuider]

6. The kind of policies you're talking about would simply create another bubble.

And if those policies failed to keep the electorate's lights on they would be rescinded within one revolution of a turbine blade.

[kristopher]

8. Create another bubble???

What are you talking about? Do you even know the kind of policies I'm referring to?

One of the problems with relying strictly on price based incentives for shifting to renewables is that the move to renewables relieves upward price pressure on fossils. Considering increased demand this may not be a problem this time around anyway, however, it would be wise to structure our energy policy to take the possibility of decreased prices into account.


Your 'if' has about as much relevancy as the one about bullfrogs and wings...

[Zachstar]

5. Haha Amen!

[robertpaulsen]

7. Pass it over to me...

:smoke:

Have you read the full translation of the Fatih Barol interview? Devastating.

Fatih Birol interview: 'Leave oil before it leaves us'
http://www.energybulletin.net/43604.html

[GliderGuider]

9. If I had to pick one word to describe Birol in that interview it would be

Frightened.

He speaks like a career diplomat who has looked into the abyss.

[kristopher]

10. I didn't detect fear; just objective analysis

projection: the attribution of one's own attitudes, feelings, or desires to someone or something as an unconscious defense against anxiety or guilt. (see defense mechanisms).


www.freudfile.org/psychoanalysis/dictionary.html

[GliderGuider]

14. Statements like this give him away:

"And when we present the WEO 2008 this November, I think it possible that the sirens will shrill even louder." That's not objective analysis -- the choice of language is almost primal.

He's putting the best face he can on a bad situation, as a diplomat and chief economist is supposed to do. He emphasizes shortfalls in investment, as is to be expected given his job. However, he pays more than passing attention to shortfalls due to depleted fields, says that 4% per annum declines are to be expected and that WEO 2008 will have even worse news in it. He says that $5.4 trillion needs to be invested to meet demand, but then confirms that OPEC (responsible for half of all production and the only place where further growth is possible) is planning on investing less than 4% of that amount. And then he says, "this year for the first time we announce a "supply crunch" situation."

Given all the ways a chief economist could describe the current state of affairs in the oil industry, the information and phrasing he used is quite revealing.

On other points you've raised:

While keeping their oil in the ground can be described as prudent management on the part of producing nations, production shortfalls spell danger for the global economy -- especially if they happen before replacements are readily available, as Birol is saying will happen.

Oil and gas depletion is only a good thing for the environment as long as coal isn't used as a substitute. As the recent discussions of Bangladesh make clear, people will gladly use coal if the alternative is energy shortages.

[losthills]

11. "Frightened" is the right word.

"Birol:
"Exactly 12.5 million barrel a day are still missing, about 15 % of the global oil demand (the current global oil consumption is 84 million barrel a day, note from the editor). This gap means that we could face a supply shortage and very high prices during the next years"

And we all should be....

[kristopher]

12. Have you ever heard of a little thing called Global Warming

High prices and lower levels of use are good things.

He repeatedly stresses the shortage is lack of investment based on the desire of producers to icrease prices and preserve their most valuable asset for future generations. That isn't a 'crisis' that is good resource management.

I hear people here all the time wailing and moaning about how we are destroying the world with our high consumption lifestyle, then when you are faced with the reality of the change you are arguing for, you start whining and complaining about the end of civilization.

Get an effin grip.

[losthills]

13. What's a "effin?"

[Nihil]

15. A quantitative adjective, usually used in multiples of two ...

... as in "two effin big" or "two effin fast" ...
:hi:

[losthills]

16. I'd rather have a couple muffins.

Banana nut....