The Oil Drum

Following is the Russian commentary portion from our draft of the final written report on Brown/Khebab Net Oil Exports by the top five:

Russia’s initial 10 year projected production decline rate is -5.1%/year plus or minus 2%. The projected rate of increase in consumption, which is heavily weighted toward recent consumption and therefore on the low side, is +0.3% plus or minus 0.8%. The initial 10 year projected net export decline rate is -8.2%/year, plus or minus 4%. Our middle case shows Russia hitting zero net exports is 2024, within a range from 2020 to 2029.

We believe that Russia’s recent rebound in production was primarily a result of Russia making up for what was not produced following the collapse of the Soviet Union, and based on our mathematical model, Russia has now “caught up” to where its post-1984 cumulative production should have been.

This summer Alfa Bank warned of problems with mature Russian oil fields because of rapidly rising water cuts. Just recently, Renaissance Capital brokerage said that excluding the Sakhalin-1 Field, daily crude output in Russia has been down year-on-year since May. And there have been recent warnings that new fields in Eastern Siberia are too small and being developed too slowly to offset the production declines in Western Siberia.

The above image is from Jeff Rubin's (CIBC) October 2007 presentation OPEC's Growing Call on itself (PDF).

You probably mean this news which has been circulating for 2 years now:

Russian oil output could peak .... in 2010..... Russian Industry and Energy Minister Victor Khristenko said.

The latest I could find about that was this IHT article:

The oil and gas fields feeding this bonanza are running dry. Russian gas output has leveled off; oil production is expected to peak by 2010. Russia has more gas and oil, but its energy sector has to make the right decisions now to tap new fields. Western energy companies, whose capital and know-how will be essential to sustain Russian oil and gas production, have felt distinctly unwelcome in Putin's Russia

Coincidentally, Rosneft is also renegotiating their deal with China after 2010:

State-controlled Rosneft (ROSN.MM: Quote, Profile, Research), Russia's largest oil firm, said on Tuesday it will not renew its existing crude oil supply contract to China after 2010 unless China offers better terms.

There has also been discussion about overstated reserves:

Mitvol was visiting analysts with several banks in the United States who hold investments in companies operating in Russia, warning them about the dubious reserve accounting methods.

Then again, there's been discussion about Russia capping it's production voluntarily. High prices really is good for Russia (and esp. Putin's cabal):

So Russia may be about to cap its oil production just when the global community is looking for it to produce more oil. Of course, that is the global community's problem, not Russia's.

As for actual export data, exports did fell in 2006 2.4% according to Prime-Tass news agency (article not available on web anymore). Rian reported a 1% fall y-2-y for 2006 exports for Russia.

However, according to Alexander's Gas & Oil Connections, Russia's 1-8/2007 oil exports grew by 4.75% compared to year earlier.