Russia’s Oil Production is About to Peak

Since 2005, the Russian oil industry has been in constant turmoil. Production growth has also slow down significantly maybe as a result. The Exxon Sakhalin-I project has now reached its peak and production is experiencing a steep decline since. On the upside, many projects are expected to come online and the IEA forecasts that oil production in Russia will increase by 90,000 bbl/d in 2008 and 300,000 bbl/d in 2009, following growth of 200,000 bbl/d in 2007.

The dramatic drop down in production growth observed by Stuart is still going on and is now close to 0 (i.e. flat production). Several trend lines can be drawn, in particular the trend for 2007 in purple would imply an immediate decline in 2008. However, several decline acceleration periods have occurred in the past (similar lines could have been drawn in 2001 and 2004) so it is unlikely that the rapid decline observed in 2007 will continue in 2008.

The Oil Drum