Russia oil output falls for first time in a decade

MOSCOW (Reuters) – Russian oil production fell by around one percent in 2008, official data showed on Friday, the country’s first annual decline in a decade after large increases in previous years and a sign of things to come.

The decline is widely expected to continue because of ageing reserves and plunging oil prices, which combine with heavy taxation to leave producers with limited cash to invest in maintaining production and opening new fields.


The Energy Ministry data showed that December crude and gas condensate production fell 1.6 percent, month-on-month, to 9.66 million barrels per day (bpd), bringing the annual average output to 488.105 million tonnes or 9.78 million bpd.

The annual figure is 0.9 percent lower, on a daily basis, than Russia’s 2007 oil production, which stood at 491.481 million tonnes or 9.87 million bpd.

Analysts expect oil output growth to recover only in the next decade after a number of new major deposits are launched in Eastern Siberia, which is rich in resources but lacks infrastructure.

Reuters