Russian oil competes despite flat output-investor

Russian oil output may stay flat but offers a competitive return as global oil companies face the rising cost of developing tougher, less accessible fields, an owner of Russia’s No. 3 oil company said on Friday.

“It’s true production reached its peak. It’s true we might not see the same rate of growth,” said Viktor Vekselberg, a major shareholder in BP’s Russian oil venture.
“But we will see production on the same level. Maybe it will decline a little, a few percent. But nothing catastrophic.”

Russia’s oil output dropped one percent in the first quarter of this year, though the oil minister said this week it would pick up and rise one percent for the full year.

A progressive tax on incremental profits from a rising oil price has reduced the funds available for re-investment in Russia’s oil sector, though the government has proposed reductions in the tax take which Vekselberg called a step in the right direction.

Reuters