For Russia, An End To Growth is In Sight

Russia’s resurgent oil production has fueled growth outside of the Organization of Petroleum Exporting Countries (non-OPEC) since 1999. The end is now likely in sight for yearly increases from the Federation. Growth has slowed since 2004, and although most analysts expect increases to continue in the near term, Russia is poised to peak or plateau sometime in the 2010-2012 period. If you are concerned about peak oil, it is necessary to track events in the world’s largest oil producer. The eventual outcome is uncertain, but a peak in Russia’s oil production in the medium-term seems all but assured.


The Energy Information Administration’s (EIA) data has Russia’s 2007 oil production at 9.846 million barrels per day (b/d, 5-month average), where oil includes crude, condensate, and natural gas liquids. Their graph (left) shows the longer trend. Production is expected to surpass 10 million b/d sometime this year.

The Paris-based International Energy Agency’s (IEA) Medium-Term Oil Market Report anticipates slower growth in Russia’s production. Output peaks at 10.61 million barrels a day in 2011 (3rd graph down, left) and declines in 2012. The IEA qualifies their forecast, saying that “extrapolating a decline in Russian production in the longer term [after 2011] would be … premature before examining post-2012 prospects (field developments) in detail.” The Russian Ministry of Economic Development does not feel the same need for caution. Pravda’s Stable oil production to make Russia world’s leading economic power by 2020 (July 25, 2007) reports that the ministry expects oil output to stabilize at 10.6 million b/d (530 million tons per year) sometime in the future.

Russia is unusual nowadays in that almost all of their production is inland. TNK-BP’s 2006 Annual Report (graph left) shows how Russia’s production growth has moderated over the last four years when offshore developments (mostly Sakhalin) are excluded. Russia’s future output depends on the usual competition between managing dwindling production in old depleting fields and putting new oil projects on-stream. Sufficient investment must be available to support both activities.

ASPO-USA