01-12-2017, 11:09 PM
For every one dollar reduction in the price of oil, Russia suffers a staggering two billion dollar loss in its revenue. On top of the economic sanctions slapped on Russia following the annexation of Crimea, one may consider the record Russian oil production of 11.247 mbpd nothing short of a miracle. But how did Russia, while other oil producers were in doldrums, keep its nodding donkeys busy pumping oil? In the U.S., the rig count was falling every week and oil companies were filing for bankruptcy. Yet the Russian production in October touched a post-Soviet Era high. The secret to its success appears to be a combination of tax measures, the dollar value and the advantage of low-cost production.
The Secrets Behind Russia’s 2016 Oil Success | OilPrice.com
OPEC's production cuts combined with expected output growth from the US and former Soviet Union suggest that the barrels that will actually be pumped and sent to market will trend lighter and sweeter over the short term, according to data cited by Michael Tran, commodity strategist at RBC Capital Markets, in a note. Within OPEC, the bulk of the cut will be falling on countries that produce medium and heavy oil. Meanwhile, Libya and Nigeria, which are sitting out the cut as noted above, produce light and sweet crude. In other words, the production cut deal tightens the amount of medium/heavy oil on the market more than sweet and light. And, although Tran notes it is unlikely, sustained production improvement from Nigeria or Libya would add even more light and sweet. Moreover, the market is further skewed when factoring in other players.
Problem with OPEC production cut - Business Insider
Big Oil is poised to reap rewards this year as investments made before the crude-price slump pay off just as the recovery starts. Seven of the world’s largest energy companies will together boost oil and natural gas output by 398,000 bpd, the most since 2010, according to data from Oslo-based consultant Rystad Energy AS. In 2018, output will rise even faster.
Big Oil hits sweet spot as projects reap rewards of recovery
The oil industry will shake off the effects of the biggest downturn in a generation this year as they more than double project approvals and increase exploration spending for the first time in three years, according to Wood Mackenzie. Companies will green-light more than 20 oil and gas fields for development compared with nine in 2016, the Edinburgh-based industry consultant said in a report Wednesday. Drillers, led by U.S. shale operators, will also increase spending on exploring for new oil and developing existing projects by 3% to $450 billion following two years of cuts.