Tuesday, June 02, 2009
Russian gas output takes a tumble
02 June, 2009 – Upstream OnLine – Russia's natural gas production declined sharply last month as the country cut output sharply in response to plunging demand in Europe and at home. However, the country's oil output held steady, Energy Ministry data showed. The data, released today, showed natural gas production at Russia's Gazprom reached new 10-year lows to just 980 million cubic metres per day, down 14% from April and 34% from May last year, a Reuters report said. European consumers have been delaying gas purchases since the start of the year, waiting for prices to finally catch up with lower oil prices and switching to alternative fuels or pumping gas from underground storage facilities. Russian gas consumption also fell as the country entered its first recession in a decade with industrial production recording a double-digit fall in the January to April period. Analysts told the news agency they expect to see a recovery in gas demand in the second half of the year. Around 80% of Russian gas output comes from Gazprom, which supplies a quarter of Europe's gas. The rest is produced by smaller independent gas companies or oil producers. Russia's total gas output in May was 12% lower than in April, the data showed. However, oil production in May stood at 9.84 million barrels per day, unchanged from April this year and up 1% year-on-year. Last year, Russian oil output fell by around 1% and concerns were high that lower oil prices and lagging investments would lead to yet another drop this year. Russian pipeline monopoly Transneft's oil exports stood at 4.4 million bpd in May, an increase of 0.6% from the 4.37 million bpd pumped in April. However, exports slipped 1.4% year-on-year. In May last year, Transneft pumped 4.46 million bpd.