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Supply Chain

Russian Crude Output Hits Monthly Record Amid Plunging Prices

Russia’s crude output set another post-Soviet record in December, a sign that the nation’s producers are withstanding the slump in oil prices, according to Energy Ministry data.

The country’s crude and gas condensate production increased to 10.825 million barrels a day last month, beating the previous record set in November by 0.4 per cent, Bloomberg calculations based on the data show. Output for the year increased 1.4 per cent compared with 2014, exceeding 534 million metric tons, or almost 10.726 million barrels a day, according to the preliminary information e-mailed from Energy Ministry’s CDU-TEK unit.

Russian crude producers have been setting post-Soviet records even amid plunging prices and U.S. and European Union sanctions that cut access to foreign financing and technology. The companies have managed to squeeze more crude out of some aging fields in West Siberia and brought a few mid-sized new projects on line.

Russia’s crude export rose to 5.25 million barrels a day in 2015, according to the data, with supplies to countries outside the former Soviet Union jumping 11 per cent to more than 4.42 million barrels.

The Russian government, which relies on oil for about 40 per cent of its budget revenue, doesn’t expect a drop in production this year.

Investments made two to three ears ago have been supporting output in 2015 and will do so in 2016, Energy Minister Alexander Novak said Dec. 22. Still, production may decline next year if Russia has to increase the tax burden on the industry to narrow the budget gap given the plunging oil price, he said.

News by Bloomberg, edited by ESM. To subscribe to ESM: The European Supermarket Magazine, click here.

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