Russia Overtakes Saudi Arabia As World’s Largest Oil Producer

Heightened production activities among its state-owned oil companies helped push Russia’s crude oil output to a post-Soviet era record high of 10.37 million barrels per day (bpd) last year, according to data released by the country’s energy ministry on Wednesday, earning Russia the title of the world’s largest oil producer in 2012 ahead of traditional giants Saudi Arabia.

Heightened production activities among its state-owned oil companies helped push Russia’s crude oil output to a post-Soviet era record high of 10.37 million barrels per day (bpd) last year, according to data released by the country’s energy ministry on Wednesday, earning Russia the title of the world’s largest oil producer in 2012 ahead of traditional giants Saudi Arabia.

The data showed that Russia’s oil and gas production grew by at least one percent last year, whereas Saudi Arabia on the other hand had deliberately restrained its output in order to steady global oil prices.

Related: Saudi Arabia May Become Net Oil Importer By 2030: Citigroup

Related: Saudi Arabia Vows To Lower Oil Prices

Related: U.S. to Overtake Saudi Arabia as Top Oil Producer By 2017

Although Moscow has pledged to keep crude production at no less than 10 million bpd until 2020, most analysts did not expect output to grow even further this year, particularly as Russian brownfields – established oil fields that account for 80 percent of the nation’s output – gradually become depleted.

“We expect Russia’s crude production to be lower by around 100,000 barrels per day in 2013 mainly because brownfield production declines should outpace greenfield supply growth,” told International Energy Agency’s (IEA) supply analyst Michael Cohen to Reuters.

[quote]“We see Russian total oil output virtually unchanged this year as more widespread EOR (enhanced oil recovery) application and an increase in output in recently developed fields compensate for the declines in the mature fields,” added Vienna-based JBC energy consultancy in a separate interview.[/quote]

The Kremlin-owned Rosneft reportedly was responsible for almost half of the increase in production last year. The company ramped up activity at its Vankor oilfield in eastern Siberia; while its acquisition of Anglo-Russian TNK-BP for around $55 billion in a cash-and-stock deal – to be completed by the first half of this year – is expected to turn the company into the world’s largest oil producer with a forecasted output of 4.6 million bpd.

But while oil production increased last year, Russia’s output of natural gas slipped by 2.3 percent to 655 billion cubic meters, on the back of a decline in demand from Europe.

Nevertheless, state-owned gas company Gazprom remained the world’s largest gas producer, shifting some of its sales from Europe to Asia.

Related: Russia To Build $38 Billion Gas Pipeline To Asia

Related: Nuclear-Free Japan Ponders Gas Pipeline From Russia

According to Reuters, Moscow also has plans this year to exploit its shale resources this year, with Rosneft reaching an agreement with Exxon Mobil last month to tap the shale oil in West Siberia.