Russian oil company says production is up

MOSCOW, Dec. 27 (UPI) -- As supply-side issues weigh on oil markets, Russian oil producer Gazprom Neft said its production for the year was up more than 7 percent from 2015.

The company, the fourth largest oil producer in Russia, said in a summary statement its full-year production was expected to reach 650 million barrels of oil equivalent. At a time when Russia is expected to contribute to the bulk of a planned production cut next year, the company's output would be 7.7 percent higher than 2015 if estimates are accurate.

Members of the Organization of Petroleum Exporting Countries agreed to cut production by about what it expects in demand growth next year. Most of that cut depends on non-member state cooperation and relies in large part on Russia to be effective at easing the supply-side strains that dragged oil prices to below $30 per barrel in early 2016.

Economists with French financial services company Societe Generale said Russia has a poor track record when it comes to managed declines. This year, Gazprom Neft commissioned two new oil fields and boasted that its Prirazlomnoye field, situated in the Russian Arctic, passed 22 million barrels in cumulative production.

Gazprom Neft is a division of Russian energy company Gazprom. Chairman of the Board of Directors Alexei Miller said a two-year plan for the oil producer called for peak investments in production

"I have no doubt that over the next year Gazprom Neft will retain its market-leading position, both in terms of its performance and rapid business growth," he said in a statement.

Russia's stance on a production plan set to enter into force next week has been fluid, with the Kremlin advocating for a freeze rather than a cut in production.

Russia set up an advisory panel that would monitor compliance with the OPEC agreement. Russia said it would cut about 300,000 barrels of oil per day from output, with is more than half of the combined agreements from non-OPEC members.