russian oil companies have reduced drilling rates compared to last year's record due to further production cuts agreed with OPEC+. UNN writes about this with reference to Bloomberg.
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Between January and June, drilling rigs in russia drilled 14,370 kilometers of production wells, down 2.5% from the same period last year, according to industry data. The slowdown in drilling was part of moscow's voluntary cooperation with several OPEC countries, including Saudi Arabia, to stabilize the global oil market.
The OPEC+ production ceilings, current and expected, serve as a deterrent to production growth and limit the amount of capital that russian oil companies consider reasonable to spend on drilling. They are drilling enough to maintain the plateau and have some spare capacity, but no more
russia is implementing two OPEC+ production cuts. The first reduction of 500 thousand barrels per day was announced at the beginning of last year, and the second reduction of 471 thousand barrels per day is expected to be implemented by September this year. The production level is expected to remain at 8.978 million barrels per day until October, after which russia will begin to gradually lift restrictions in accordance with the OPEC+ agreement.
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The OPEC+ supply restrictions have halted the growth of drilling in russia, which had been going on for the past two years and demonstrated the resilience of the russian oil industry to sanctions due to the invasion of Ukraine. Western restrictions on the supply of energy equipment and technology were aimed at reducing russia's ability to produce oil, which is its key source of revenue.
Although russia is cutting production this year, it is still producing more oil than agreed upon. In June, the country produced 9.139 million barrels per day, according to OPEC's latest monthly report based on secondary sources.
Recall
OPEC+ countries have agreed to extend most of their oil production cuts through 2024, but to begin phasing them out in 2025 as the group seeks to support the market amid slow global demand growth.
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