Gazprom's natural gas output collapsed in February: due to demand destruction at home and abroad
Russian gas output slides
Russian oil output and exports edged up in February while natural gas production of Russia's gas export monopoly Gazprom collapsed due to demand destruction at home and abroad, data showed today.
Data from the energy ministry showed Gazprom produced 1.41 billion cubic metres of gas in February, down 2% from 1.44 bcm a day in January and 16% lower than 1.67 bcm a day in February 2008.
Russian oil exports stood at 4.33 million barrels per day, up from 4.25 million in January and 3.99 million in February 2008.
Oil production also edged up to 9.72 million bpd from 9.70 million in January and was slightly down from 9.79 million in February last year, reported Reuters.
But gas production has been relatively stable over the past year and contracted sharply only in January, when Gazprom said it was unable to supply gas to its customers in Europe for most of the month because of a pricing dispute with Ukraine.
Gas exports resumed at the end of January, but February showed no steep recovery.
Alexander Burgansky from brokerage Renaissance Capital said that, while the general economic slowdown was causing some reduction in European and Russian gas demand, he believed the contraction largely reflected high gas prices.
Gas prices are adjusted to oil products prices with a six-to-nine-month lag and are currently near their all-time high, which make alternative sources of fuel more attractive.
"We believe Gazprom's production and exports will rebound strongly in the second quarter as contract gas prices are set to decline sharply," he said.
Gazprom extracts around 80% of gas in Russia, while the rest is produced by smaller independent gas firms or oil majors.