November 2, 2016 / 8:51 AM / 2 years ago

UPDATE 1-Russia's oil output in Oct hits new post-Soviet era high

* Output reached 11.2 mln bpd in October
    * Energy Ministry expects further rise in 2017
    * Increase in drilling supporting output growth

 (Adds detail, analyst comments)
    By Vladimir Soldatkin
    MOSCOW, Nov 2 (Reuters) - Russia's oil output set a new
post-Soviet era record high in October, rising 0.1 percent from
September to 11.2 million barrels per day (bpd), energy ministry
data showed on Wednesday. 
    The rise underscores the difficulty the government could
have in freezing output levels as part of a global pact with
other top producers in order to support oil prices.
    Oil and gas sales account for more than a third of Russia's
state budget revenues, down from half in 2014 reflecting a fall
to below $50 per barrel from $115.
    In tonnes, Russia's oil output in October rose to 47.386
million from 45.483 million in September.
    Supply from the Organization of the Petroleum Exporting
Countries also rose to a record level in October as Nigerian and
Libyan output partially recovered from disruptions and Iraq
boosted exports. 
    Ministry data showed Rosneft increased production
by 0.1 percent, Lukoil's output rose by 0.9 percent,
and Surgutneftegaz cut production by 0.3 percent.
    The rise in Russian crude output has been supported by a
increase in drilling as companies capitalise on a weaker rouble.
    "The pace of the growth in drilling has been maintained, at
16 percent for the nine months of the year, while Rosneft
cranked up drilling at Samotlor oilfield by 40 percent and by 67
percent at Yugansk," said Valery Nesterov, analyst at Sberbank
CIB.
    "We see that the energy ministry is in a predicament while
holding the talks about the (output level) freeze."
    He added that the quality of the drilling, such as
horizontal drilling, has also improved.
    The ministry expects a rise in oil output in 2017 to 548
million tonnes, or 11 million barrels per day, due to new fields
coming onstream.
    Nesterov said that Russia has potential for growth to 2019,
when a peak of 570-575 million tonnes could be reached thanks to
investments made before sanctions introduced by the West against
Moscow for its role in the Ukrainian crisis in 2014.
    The measures virtually bar Russian oil producers from
raising capital on the Western debt market.
    This week, Russia's No.2 oil producer Lukoil launched the
Filanovsky offshore oil field in the Caspian Sea, the second
major oil field opened by Russia in a week and the fourth this
year. 
    Natural gas production in Russia rose to 61.07 billion cubic
metres (bcm) or 1.97 bcm per day in October from 51.33 bcm in
September.

 (Reporting by Vladimir Soldatkin; editing by Jason Neely)
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