Russia says it could get more oil out of a Far East field next year, even as ministers meet to review the prospects of holding output steady. Photo by Heather Snow/Shutterstock
MOSCOW, Sept. 28 (UPI) -- An official at Russian oil company Rosneft said oil production from a field in the Far East could increase by as much as 20 percent next year.
According to Russian news agency Tass, Rosneft aims to increase crude oil production at the Sakhalin operation by as much as 20 percent to around 3 million barrels. As much as $2 billion in investments, meanwhile, would go toward Rosneft's operations in the Far East.
Production for the second quarter for Rosneft was 4.1 million barrels of oil per day, an increase of 0.5 percent from the previous period. Total hydrocarbon production was up 0.2 percent from the first quarter and 0.7 percent year-on-year.
The company credited the increase in production to an intensified drilling program, which was up 16 percent from the first quarter. The total footage of development drilling increased 48 percent from last year during the first half of 2016.
One of the top producers of crude oil in the world, the Russian company in June reported its net profit of about $224 million was off 75 percent from last year. The company attributed lingering weakness in crude oil prices, tax pressures and an increase in overall investments for triggering the decline.
The touted increase from Sakhalin comes at a time when ministers from major oil-producing nations like Russia meet on the sidelines of an international energy conference in Algeria to discuss extraordinary measures to support higher crude oil prices.
Crude oil prices dropped from $100 per barrel in 2014 to below $30 per barrel early this year as supply far outweighed demand in a global economy struggling to leave the last recession behind. Oil prices this year moved briefly above the $50 mark on expectations of an emerging balance between supply and demand. Those expectations, however, have yet to materialize.
Speaking from Algeria early this week, Russian Energy Minister Alexander Novak said it wasn't essential to push for artificial measures as the market would take care of itself.
Novak last week said ministers could consider an option to keep production rates steady for the next three to six months, but there are no offers on the table to actually cut production.