Russia's Rosneft is braced for a decline in oil production this year despite a gradual removal of output restrictions that have been imposed on the company by the Kremlin under its commitments to members of the Opec+ alliance.
Speaking on a conference call on Friday, Rosneft first vice president Eric Liron said the oil giant expects annual output of oil and condensate to fall by 5% in 2021.
In 2020, Rosneft reported an 11% annual decline in oil and condensate production to 4.1 million barrels per day and a 6% drop in gas output to 63 billion cubic metres.
Liron has identified the sale of legacy oil producing assets to privately held operator Neftegazholding as a chief reason for the expected decline.
Rosneft finished the transfer of control over some of its regional oil subsidiaries — capable of producing between 200,000 bpd and 280,000 bpd — to Neftegazholding in December.
Oil greenfields on track
Despite the production restrictions, Rosneft managed to bring online the North Danilovskoye oilfield in East Siberia in the fourth quarter as per its original plan.
North Danilovskoye is expected to hit its annual plateau production of about 41,000 bpd in 2024 after the company completes 95 producing wells according to its development blueprint.
By the end of December, just 18 of these wells had been drilled, Rosneft said.
The company is continuing development drilling on the Yerginsky block in West Siberia where first oil production started in 2017.
Rosneft expects several fields within this block to reach plateau production of over 90,000 bpd also in 2024, as it still needs to build additional in-field pipelines, drilling pads and other supporting infrastructure.
Gas production target missed
Despite seeing some progress in implementing oil greenfield projects, Rosneft has missed a gas output annual target of 100 Bcm in 2020.
The start-up of gas production at the Kharampurskoye field in West Siberia has been pushed out to next year as against the earlier deadline of 2021.
The field, where Rosneft’s minority partner is UK supermajor BP, is expected to produce 11 Bcm per annum of gas at peak.
Almost all planned wells have been spud at the asset and the field has been connected by a link to the country’s trunk gas pipeline network. However, the start-up of gas production is being held up by the delay in building a gas processing plant, which is just over 40% complete, Rosneft said.
The gradual ramp-up of production at another key gas project in West Siberia, Rospan, is now scheduled to run between the first and third quarters of this year as against an earlier deadline of last year.
Rospan is anticipated to be able to produce at the annual plateau rate of over 21 Bcm of gas and over 100,000 bpd of condensate.