Russia sets new gas production record
Russian energy companies have increased natural gas production by about 5% over the past year, bringing it to record 725 billion cubic meters, Russian Energy Minister Alexander Novak said at a meeting with Russian President Vladimir Putin today.
"Our gas industry have set new gas production record - 725 billion cubic meters of gas, which is about a five percent increase from 2017," he said, noting that last year third phase of the Bovanenkovo oil and gas condensate field was commissioned, RIA Novosti reports.
Oil production has also increased last year - compared to 2017, it increased by 10 million tons (1.6%), reaching 556 million tons. "54 fields were put into operation, including several large ones, such as Russkoe, Tagulskoe, Kuyumbinskoe," Novak said.
As leading analyst of the National Energy Security Foundation, lecturer at the Financial University under the Government of the Russian Federation, Igor Yushkov, said in an interview with Vestnik Kavkaza, increase in production over the past year was so significant due to growth in demand in foreign markets. "We have supplied more gas to Europe, so more gas was produced. It's important to understand that the gas industry of Russia does not have any problems with production - we have very large reserves, and we can even increase production at existing fields, so everything depends solely on demand (as opposed to oil, where demand is higher than our capabilities)."
"Europe's own production is dropping, which is why Europeans are forced to import more and more gas, and the only one who can fully satisfy this demand is Gazprom. Other suppliers (Norway and Algeria) don't have necessary capabilities, and buying LNG is too costly. That's why last year gas exports rose to 200 billion cubic meters," he noted.
Alexei Kokin, senior analyst of UralSib, stressed that growth of gas production in Russia corresponds to growth of demand for Russian gas both domestically and abroad. “According to data that was published in December, gas exports to non-CIS countries should have exceeded 200 billion cubic meters. This is a very huge figure. As for demand in Russia, I honestly don't know. I think it's not too important for Gazprom."
In addition, he noted that in order to increase consumption of natural gas in Russia, it's necessary to take some additional measures to stimulate demand.