October 31, 2016 / 1:46 PM / 3 years ago

Russia opens second major oil field in a week

ASTRAKHAN, Russia (Reuters) - Russian President Vladimir Putin, who has pledged to join a global pact to cap oil output, gave the green light on Monday to start production at a new Caspian Sea field owned by the country’s No.2 oil producer Lukoil.

Russian President Vladimir Putin (C) and Lukoil Chief Executive Vagit Alekperov (L) attend a ceremony to start production at the new Filanovsky offshore oilfield owned by the Russia's second biggest oil producer Lukoil in the Caspian Sea, in Astrakhan, Russia, October 31, 2016. Sputnik/Kremlin/Mikhail Klimentyev via REUTERS

The launch, the second major oil field opened by Russia in a week and the fourth this year, puts a further question mark over oil producers’ pledges to limit output in order to support global oil prices.

Non-OPEC members such as Russia made no specific commitment about joining OPEC in capping output at a meeting with the oil cartel last week. A day earlier, OPEC itself was unable to agree on how to implement a global deal..

Lukoil’s move to put the Filanovsky offshore oilfield in the Caspian Sea onstream comes just a week after it launched a field in the Russian Arctic, Pyakyakhinskoye.

Russian oil production - already the world’s biggest - is expected to hit another post-Soviet high of 547 million tonnes this year, or 10.95 million barrels per day (bpd), rising to 548 million tonnes next year.

Filanovsky is expected to produce 4.4 million tonnes (90,000 bpd) in 2017, rising to 6 million tonnes in 2019, Vagit Alekperov, chief executive and Lukoil’s biggest shareholder, told reporters on Monday.

The company hopes the Filanovsky and Pyakyakhinskoye oilfields will compensate for an output decline in West Siberia, which Lukoil is trying to arrest by introducing a major drilling program.

Lukoil’s production in Russia is seen at around 86.5 million tonnes this year and at 87.5-88 million in 2017, with the rate of production decline in West Siberia slowing to 1.5-2.5 percent in 2017 from a forecast of 6.5-7 percent this year.

For a factbox on how Russia is ramping up its oil output in 2016-2017, click on.

Russian officials, including energy minister Alexander Novak, have long said a global oil output freeze would be the best option for the country but have not said at what level, nor where Moscow might consider capping its own production.

Lukoil is adding its Caspian oil to the global glut along with crude from a number of new deposits, launched or due to be launched this year by Russian firms Rosneft and Gazprom Neft.

Russia’s Novatek, the country’s second biggest gas producer which is adding liquids to its production portfolio, is targeting a 30 percent rise in oil and gas condensate production this year.

(Story corrects output figure in paragraph six to 4.4 million tonnes, not 1.5 million, after Lukoil clarifies data.)

Reporting by Oksana Kobzeva; Writing by Denis Pinchuk; Editing by Alexander Winning, Katya Golubkova and Mark Potter

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