MOSCOW: Russian Energy Minister, Alexander Novak, said that Russian crude oil exports are expected to rise in 2015.
Novak said that Russia, one of the world’s biggest oil producers, will maintain its crude oil output at over 10 million barrels per day (bpd), despite some expectations of a plunge in production due to lower prices.
He said Russia will continue consultations with the Organization of the Petroleum Exporting Countries (OPEC). Russia will meet OPEC officials in June in Vienna to discuss the impact of shale oil production on global oil markets.
Up to now, Russia has been cutting crude oil exports and instead sending much of its crude production to domestic refineries, a move that offers better margins than selling crude to the market at current low prices.
But crude oil exports are seen rising by up to 3 million tonnes in 2015 and to 280 million tonnes per year by 2035 from 224 million tonnes in 2014, Novak said.
Since 2000, refinery output in Russia has grown by over 45 percent to 294 million tonnes per year in 2014. That is on a par with the peak reached in the mid-1980s when the Red Army needed fuel for its campaign in Afghanistan.
Under the modernisation programme, Russia’s refineries will switch to produce fewer low-quality products such as fuel oil and more high-quality products such as diesel and gasoline, but in lower volumes.
“The strategy is to cut refining throughput,” Novak said. “That’s due to an increase in light products output on the back of modernisation.”
He forecast a decrease in oil product output to 291 million tonnes in 2015 and further to 280 million tonnes by 2035.
Consultants EY, which advice the Energy Ministry on taxes, say they expect a rise in Russian diesel production to 33 percent of the domestic oil product basket by 2020, from 26 percent in 2013.
The growth in refinery production and improvements in oil product quality have so far continued, despite Western sanctions over Moscow’s role in the Ukraine conflict. According to the Energy Ministry, 19 new units are expected to be commissioned at Russian refineries in 2015 against eight in 2014.
Novak said there was no need for new refineries, while outdated plants would be closed.
