United States exerting more influence on global oil market than other producers

Igor Sechin, Head of Russian energy major Rosneft has said that Russia is losing out to other OPEC Plus countries due to a smaller share of its oil production being exported.

Sechin, a longstanding ally of President Vladimir Putin, also said that the oil output boom in the United States, which is not a member of the OPEC Plus, was wielding more influence on the global oil market than other producers.

Some experts and analysts have noted that Russia's oil exports are still relatively high despite cuts in production.

Speaking at an economic forum, Sechin said some OPEC Plus countries were exporting as much as 90% of their output, whereas Russia supplies the global market with only half of its production.

"That puts our country in a less advantageous position under the current mechanism for assessing the impact and access to key markets," he said. "In this regard, it seems appropriate to monitor not only production quotas, but also oil export volumes, given the different sizes of domestic markets."

Currently, the Organization of the Petroleum Exporting Countries and allies including Russia, a group known as OPEC Plus, regulates only production, not exports.

Amid flagging oil prices, OPEC Plus agreed on a new oil output deal earlier this month, while Saudi Arabia, the group's biggest producer, pledged to make a deep cut to its output in July on top of a broader OPEC Plus deal to limit supply in 2024.

OPEC Plus accounts for around 40% of global oil production, while Rosneft takes the same share of Russia's oil output.

In remarks published later on Rosneft's website from Sechin's speech, he said Saudi Arabia is voluntarily cutting oil production, while also increasing production capacity.

He said Saudi Arabia may increase the amount of drilling rigs by at least a quarter in the next two years. As a result, by 2025-27, Saudi Arabia's oil producing capacity may rise by around 2 million barrels per day.

Speaking at the forum, Sechin also said it was more difficult for OPEC countries to find common ground due to differences in economic structure and oil production.

"In coming years, humanity will face the problem of production capacities and OPEC countries will no longer be able to meet the growing demand," he said.

 

Russian oil companies add 2,001 new oil wells in Jan-Mar 2023 quarter

Russian oil companies put into operation 2,001 new oil wells in the first quarter of 2023, up 10%YoY, according to Vedomosti daily, citing two sources familiar with Energy Ministry's statistics.

The increase in commissioning of new wells comes amid Russia's voluntary cut in oil production. Russian Deputy Prime Minister Alexander Novak said last week that Russian oil and gas condensate production is expected to decline to around 515 million tons (10.3 million bpd) this year from 535 million tons in 2022.

Major Russian oil companies didn't respond to Vedomosti's requests for comment, the daily said. Rosneft, Lukoil, Gazprom Neft, Surgutneftegaz and Tatneft did not immediately respond to Reuters' requests for comment.

The Energy Ministry's press office said that the government was working together with oil and gas companies to ensure the replacement and growth of oil reserves, the newspaper reported.

"This is done both to maintain current production volumes and to increase them in the future, including through the commissioning of new fields," Vedomosti said, citing the ministry.