Russian Oil Production To Peak By 2010

"Russian oil output could peak .... in 2010..... Russian Industry and Energy Minister Victor Khristenko said on Monday, Oct. 24. 'It will reach a certain plateau of production within the time frame of 2010,' Khristenko, quoted by the Reuters agency, told reporters.... On his first U.S. trip as industry and energy minister, Khristenko met with President George W. Bush and senior administration officials including U.S. Energy Secretary Sam Bodman and Commerce Secretary Carlos Gutierrez.... Russia’s oil production has stagnated since growing 9 percent in 2004 and a record 11 percent in 2003."
Russia Aims to Produce 510M Tons of Oil Annually by 2010 — Energy Minister
Moscow News, 25 October 2005

"Peak production from the FSU [Former Soviet Union] is expected between 2008 and 2014... The most likely outcomes for non-OPEC oil production can be obtained by combining the forecasts for the FSU and the rest of non-OPEC. Non-OPEC oil production is predicted to reach a peak between 2007 and 2011... The US Energy Information Administration forecasts non-OPEC oil production to rise to about 54 million b/d (about 20 billion bbl/year) by 2025. Based on the analysis presented here, non-OPEC oil production at this level in 2025 is highly unlikely..... This analysis.... represents a shortfall to the EIA forecast of non-OPEC supply of 20 million b/d in 2025. The failure of non-OPEC to meet a large part of incremental demand, as it has done for more than 20 years, is likely to precipitate the first crisis in oil supply. Depending on demand and FSU supply, this crisis is practically upon us and is expected to be acute after 2005.... ..."
Oil supply challenges - 1: The non-OPEC decline
Oil and Gas Journal, 21 February 2005
(The Author: Peter. R.A. Wells is managing director of Neftex Petroleum Advisors Ltd. He spent 12 years with Shell International in positions that included exploration manager for eastern Nigeria, followed by 4 years with BP PLC, where he was chief negotiator for Azerbaijan in 1992-3.)

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-10
-24T221928Z_01_N24132186_RTRIDST_0_ENERGY-RUSSIA-PRODUCTION-UPDATE-1.XML

Reuters, 24 October 2005

Russia says aims for 510 mln T oil output by 2010

By Chris Baltimore

WASHINGTON, Oct 24 (Reuters) - Russian oil output could peak at more than 510 million tonnes annually in 2010, or 10.2 million barrels per day (bpd), Russian Energy Minister Victor Khristenko said on Monday.

"It will reach a certain plateau of production within the time frame of 2010," Khristenko told reporters. That plateau would be about 510 to 520 million tonnes a year, he said, or the equivalent of about 10.2 to 10.4 million bpd.

In September, Russia produced 9.53 million bpd, which was a post-Soviet high, according to Energy Ministry data.

Khristenko said Russia aims to achieve annual output of 500 million tonnes by 2008-09.

On his first U.S. trip as energy minister, Khristenko met with President George W. Bush and senior administration officials including U.S. Energy Secretary Sam Bodman and
Commerce Secretary Carlos Gutierrez.

Analysts say that Russia's growth will continue for a few more months as oil firms ramp up production, including Exxon Mobil Corp.'s massive Sakhalin project.

Russia's oil production has stagnated since growing 9 percent in 2004 and a record 11 percent in 2003.

Russia is chasing Saudi Arabia's title as the world's top crude oil producer. Saudi Arabia pumped 9.6 million bpd of crude oil in September, according to the U.S. Energy
Information Administration.

But unlike the Middle East's oil giant, which chooses not to pump at full capacity, Russia is keen to see production hit record highs. Saudi Arabia has surplus capacity of up to 1.4
million bpd, according to the EIA.

".... a series of crises in oil supply is likely over the coming decades. The first, related to the peak and decline of non-OPEC production, is practically upon us and underpins the currently high oil prices...... The imminent inability of non-OPEC production to meet incremental demand and its decline after 2010 precipitates the second crisis as OPEC’s diminishing spare capacity (even with Iraq’s production back to preinvasion levels) becomes less and less able to accommodate short-term fluctuations.....The third crisis, due to OPEC’s incremental supply being unable to meet incremental demand, follows in the first half of the next decade. This assumes that OPEC’s reserves are as published. .....These crises will have global economic and geopolitical significance: The oil price will be high and volatile, and demand growth will have to be curtailed..."
Oil Supply Challenges - 2: What Can OPEC Deliver?
Oil and Gas Journal, 7 March 2005
(The Author: Peter. R.A. Wells is managing director of Neftex Petroleum Advisors Ltd. He spent 12 years with Shell International in positions that included exploration manager for eastern Nigeria, followed by 4 years with BP PLC, where he was chief negotiator for Azerbaijan in 1992-3.)