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Russian oil producer boasts of gains

Russian oil company Rosneft production levels gained steadily in the third quarter.

By Daniel J. Graeber
Russian oil producer boasts of gains
Russian energy company Rosneft said its had a strong third quarter production wise. Photo by Calin Tatu/Shutterstock

MOSCOW, Nov. 10 (UPI) -- At a time when major producers are assessing output, Russian energy company Rosneft reported third quarter production levels were up 1 percent.

Rosneft reported total daily hydrocarbon production increased 1 percent from the second quarter and 1.3 percent year-on-year to 4.1 million barrels per day, despite some production issues at some of its assets.

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"Hydrocarbon production continued improving steadily in third quarter 2016," the company said in a statement.

Total hydrocarbon production was up 0.2 percent from the first quarter and 0.7 percent year-on-year

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In late September, Rosneft said it 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.

Writing in the Italian daily newspaper Corriere della Sera in late October, the CEO of Rosneft, Igor Sechin, said the country wasn't going to "keep a low profile" in terms of production efforts. Russia's position on production efforts has been fluid amid proposals from the Organization of Petroleum Exporting Countries to set an output ceiling in an effort to control prices.

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OPEC said it would look for support from non-member states to adopt a production ceiling meant to keep markets balanced between supply and demand. Russian Energy Minister Alexander Novak was quoted by news agency Tass as saying it's possible to curb production should OPEC members take a formal position next month in Vienna.

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"The issue will be discussed depending on when our OPEC colleagues reach an agreement," he said.

Denis Perevezentsev, a senior credit officer at Moody's, said companies like Russian oil major Rosneft should be in a strong position assuming oil prices hold at an average of $45 per barrel next year.

Sanctions and lower crude oil prices put pressure on the Russian economy. Moody's said that, as far as sanctions are concerned, most Russian energy companies were shielded by a look toward the domestic market and state-controlled banks.

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