The Oil Drum

Okay Dissident, but what is Russian production doing? Have they plateaued or is production still increasing from one and one half percent to two percent per year? Or, are thy in slow decline.

But a better question would be; just how the hell can we tell?

Ron Patterson

Why wouldn't Russia's production decline mirror North Sea's or worse?

The decline will be entirely dependent on the state of their fields(not taxes, tarriffs, and prices)...which would be poor in a conservative estimate.

Those fields had a rest since all time peak in the 90s, but recently (last 10) have been abused, mismanaged, and then nationalized(indirectly, of course).

So, worse, seems more plausible.

Maybe it is export land model. But maybe those figures are for 12 months, and october shares most of the september period.

Since Russia's domestic consumption is a small part of its total production (six million bpd gets shipped abroad) it does not make sense that there would be shortages from declining production at this stage.

Russia's consumption, relative to production, is on the high side about 33% (total liquids). Also, as noted below our model indicates a rapid production decline, at least in the mature basins, and our middle case indicates that Russia will hit zero net exports in 17 years.

Delays in reporting combined with the normal seasonal downtrend Aug -> Dec mean it might be hard to tell - for a little while...

Come the Jan figure reported in mid-March, I think we might start to see something irrefutable.
--
Jaymax (cornucomer-doomopian)

Based on EIA data, Russia showed a small net export decline from 2005 to 2006. Following is the Russian portion of the working draft of our net export paper:

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 2018 to 2029.

We believe that Russia’s rebound in production in recent years 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, and Renaissance Capital brokerage said that excluding the Sakhalin-1 Field, daily crude output in Russia has been down year-on-year since May. There have been also recent warnings that new fields in Eastern Siberia are too small and being developed too slowly to offset the production declines in Western Siberia.