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World Oil Supply

OPEC Monthly Oil Market Report – September 2017

57

Russia

Preliminary

Russian crude oil and condensate supply

declined in August by 40 tb/d m-o-m according to

the Ministry of Energy, while NGLs output was stagnant at 0.94 mb/d. July and August oil supplies were

higher by 0.19 mb/d and 0.10 mb/d y-o-y, averaging 11.26 mb/d and 11.22 mb/d, respectively. With

production ramping up in Novoportovskoye, Prirazlomnoye and Messoyakha fields, Gazpromneft’s output in

July was 0.02 mb/d, or 3%, higher, than in October and 0.09 mb/d above a year ago in July. Condensate

output in Gasprom also rose through the start-up of the Vostochno-Messoyakhskoye field, although

according to data from the Ministry of Energy, some major Russian oil companies cut output by roughly 3%

since October. However, Russia’s oil supply in 1Q17 and 2Q17 was registered at 11.25 mb/d and

11.26 mb/d, respectively.

OPEC’s forecast for Russia’s quarterly oil supply has been kept at 10.98 mb/d for 3Q17, 4Q17 and 1Q18,

assuming production of 300 tb/d below October levels, though the oil supply for 1Q17 and 2Q17 was revised

up due to historical production data. As a result, growth of 0.03 mb/d is now expected, averaging 11.12 mb/d

in 2017, unchanged from the previous month’s assessment. Expectations for next year’s supply growth have

been revised down by 0.07 mb/d, leading to an increase of 0.06 mb/d in 2018.

Caspian

In

Azerbaijan

, according to data provided by the Ministry of Energy, oil production averaged 0.82 mb/d in

July, almost the same as in June, but lower by 42 tb/d y-o-y. Of this, 0.74 mb/d was crude and 0.08 mb/d

NGLs. Azerbaijan averaged an oil supply output of 803 tb/d in last seven months of 2017, 34 tb/d lower than

last October. Oil output in 2Q17 was pegged at 0.81 mb/d, lower by 70 tb/d y-o-y. It is expected that the oil

supply for 2017 and 2018 will decline by 0.06 mb/d and 0.05 mb/d y-o-y to average 0.79 mb/d and

0.74 mb/d, respectively.

Kazakhstan’s crude production

was stagnant at 1.48 mb/d in July compared with June. NGLs output also

remained steady at 0.27 mb/d in July, indicating a total liquids supply of around 1.74 mb/d. This is

unchanged m-o-m but much higher at 0.18 mb/d y-o-y. Continuous gains from Kashagan field – which

reached 0.2 mb/d in July according to statements from operator Eni – and a rebound in volumes from the

Karachaganak condensate field – offset a drop in production from Tengiz. Kashagan operating consortium

NCOC started gas injection into the reservoir in August, according to the Deputy Energy Minister of

Kazakhstan, for the purpose of raising oil output to at least 0.3 mb/d by the end of 2017 and triggering the

field’s expansion to around 0.37 mb/d by the end of next year. Based on this plan, and despite keeping the

quarterly production forecast unchanged at 1.68 mb/d, the forecast for Kazakhstan’s oil production in 2017

was revised up to 1.74 mb/d. However, production in the next year is likely to be more uncertain, as peak

output in Kashagan is now expected to shift to 2019. Thus, the 2018 supply forecast was revised down by

0.03 mb/d to average 1.80 mb/d, indicating growth of 0.06 mb/d y-o-y.

Graph 5 - 23: Kazakhstan liquids supply quarterly

forecast, 2016-2018

Graph 5 - 24: China liquids supply quarterly

forecast, 2016-2018

103

222

268

123

102

105

8

38

0

50

100

150

200

250

300

1,300

1,400

1,500

1,600

1,700

1,800

1,900

1Q 2Q 3Q 4Q

2017/16 (RHS)

2018/17 (RHS)

2016

2017*

2018*

Note: * 2017 and 2018 = Forecast.

Source: OPEC Secretariat.

Y-o-y change (tb/d)

Production (tb/d)

-229

-103

-94

-50

-122

-214

-155

-187

-250

-200

-150

-100

-50

0

3,700

3,800

3,900

4,000

4,100

4,200

4,300

1Q 2Q 3Q 4Q

2017/16 (RHS)

2018/17 (RHS)

2016

2017*

2018*

Note: * 2017 and 2018 = Forecast.

Source: OPEC Secretariat.

Y-o-y change (tb/d)

Production (tb/d)