Rosneft to chase production growth

Russian state-controlled Rosneft has resumed chasing oil and gas production growth, encouraged by "positive trends" on global energy markets and by the Opec+ deal relaxation.

"The recent trends in physical supply balances and energy prices underpin our drive to increase investment and production," Rosneft's first vice president Didier Casimiro said today. "Large projects for the development of new fields Vostok Oil, Rospan, Kharampur and others are being successfully implemented, creating the basis for future growth."

Rosneft, which has pledged to reduce its carbon intensity by 2035, allocates up to 90pc of its capital expenditure (capex) towards upstream projects with its main focus being development of Vostok Oil in Russia's far north. It is scheduled to come on stream in 2024 and to reach production of 600,000 b/d.

Rosneft's spare crude production capacity was 25,000 t/d (182,500 b/d) at the end of the second quarter, which suggests that it could be fully utilized by the end of this year. Management said that Rosneft increased output at its most efficient assets in western Siberia and the Volga-Urals region in the quarter, which allowed it deliver 5.1pc quarter-on-quarter crude production growth to 3.89mn b/d.

During the first six months of 2021 Rosneft increased the share of greenfield projects in its overall output by 23pc year on year, to 485,000 b/d. These projects include East Messoyakh, Kuyumbinskoye, Yurubcheno-Tokhomskoye, Kondinskoye, Russkoye, Srednebotuobinskoye, the Erginsky hub, Severo-Danilovskoye and the Rospan project. The former two fields are developed in partnership with state-controlled Gazpromneft.

Rosneft increased capex by 5.3pc quarter on quarter, to 237bn roubles ($3.22bn). Capex in the first six months of this year was up by 25pc year on year at Rbs462bn, with higher spending at Vostok Oil.

Rosneft's upstream operating costs were unchanged in the second quarter from the first three months of the year at $2.6/boe. Management put this down to the recent sale of "tail assets", and ongoing energy cost optimisation.

By Oksana Yablokova