Russian Ministry Sees
Oil-Output Growth
Of Just 2.4% in 2005
(((further to the theme of growth, or lack therof, in non OPEC nations))
By GREGORY L. WHITE
Staff Reporter of THE WALL STREET JOURNAL
April 28, 2005 6:20 p.m.
MOSCOW – A new government forecast shows Russian oil production this year could grow by as little as 2.4%, as increased state pressure on the oil business has caused a drop in investment.
The preliminary outlook, released this week in a quarterly report from the Ministry of Economic Development and Trade, forecasts output of 470 million tons, or 9.42 million barrels a day. That forecast is about 300,000 barrels a day below other Russian official forecasts that call for growth of about 5% this year.
The ministry's report is one of the first official admissions that the sharp worsening of the business climate since last summer -- when the government began dismantling oil giant OAO Yukos in a back-taxes case widely viewed as politically motivated -- has severely affected a sector that's been critical to Russia's economic growth.
"One of the main reasons for the slowdown in the growth of oil production seen since July 2004 has been a growing lack of confidence among business in the future amid growing pressure from the state and uncertainty about the rules of the game set by the government," the ministry report said. As a result, investment in the oil sector dropped 6.5% last year, the report said, after a sharp increase in 2003. The report didn't refer to Yukos specifically.
Even the high end of the report's range for output this year -- 482 million tons, or 9.66 million barrels a day -- falls short of the 485-million-ton forecast issued last month by the Federal Energy Agency, whose estimate comes to 9.72 million barrels a day. Either figure would have represented a sharp slowdown from the average 8% annual growth rate seen in the previous five years, when Russia was the single largest source of additional crude supply on the global market.
The latest report is also more conservative than the expectations of the Paris-based International Energy Agency, which early this year cut its expectation for Russian output growth to 3.6%, or 9.6 million barrels a day in 2005.
In the first quarter, oil output rose 3.6%. In 2004, full-year production was 459 million tons, or 9.20 million barrels a day, up 8.8%. |
