Russia's Oil Output Falls in June, Extending Decline (Update1)
By Greg Walters
July 2 (Bloomberg) -- Russian oil production declined in June, bringing the world's second-largest crude exporter closer to its first annual drop since 1998.
Production fell to 9.77 million barrels a day (40 million metric tons a month), 1 percent less than in June last year, according to data released by CDU TEK, the dispatch center for the Energy Ministry. Output rose 0.2 percent compared with May.
Russia's production may have peaked as producers struggle with aging fields, rising costs and increasingly remote new deposits, senior executives at Moscow-based OAO Lukoil and TNK-BP, the country's two-biggest independent oil companies, have said. The finance and energy ministries are developing tax-cut proposals in a bid to revive growth.
Crude oil exports via OAO Transneft, Russia's oil pipeline monopoly, fell 1.3 percent compared with the same month last year.
Russia's government has supported raising the level of when its oil-extraction tax takes effect to $15 a barrel from $9 a barrel as oil companies' costs soar. OAO Rosneft, the country's biggest producer of crude, raised capital spending 69 percent in the first quarter this year to $1.75 billion.
The oil market will be ``tighter'' than previously expected because many major projects throughout the world are experiencing ``slippage'' of 12 to 15 months in their completion time, Nobuo Tanaka, executive director of the International Energy Agency, said yesterday.
Oil prices touched a record $143.67 a barrel in New York this week on concerns of a disruption to Iranian output, capping a 47 percent increase in the first half of the year.
To contact the reporter on this story: Greg Walters in Moscow gwalters1@bloomberg.net
Last Updated: July 2, 2008 05:14 EDT
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