Export disappears from gas – Kommersant

Gas production in Russia continues to decline relative to last year. According to Kommersant, in January-April, gas production fell by 10% year-on-year, to 235 billion cubic meters, in April – by 10.3%, to 55 billion cubic meters. Gazprom has reduced production by almost a quarter in four months due to a decrease in exports to the EU. Independent producers slightly increased production. But experts remind that gas production figures were at record levels at the beginning of last year, and in the near future the effect of this high base will begin to fade.

Gas production in the Russian Federation in January-April decreased by 10.15% year-on-year, to 235 billion cubic meters, sources familiar with the statistics told Kommersant. In April, gas production decreased by 10.3% compared to the same period last year, to about 55 billion cubic meters.

Gazprom continues to cut production. Thus, according to Kommersant’s sources, the production volume of “other subsoil users”, which almost completely reflects the production indicators of the monopoly, fell by 20% in April, to 34 billion cubic meters, in January-April – by 18.24%, to 150.9 billion cubic meters (data including gas flared). The reduction in gas production by Gazprom is a consequence of the reduction in exports to Europe: now relatively small volumes of supplies go only through Ukraine and the Turkish Stream. Gazprom did not respond to Kommersant’s request.

“Gazprom’s production continues to be disproportionately low, and the company is forced to bear the brunt of regulating the Russian gas balance by mothballing wells at its fields in the face of a sharp decline in export demand for Russian gas in Europe,” said Vitaly Yermakov from the Higher School of Economics.

Gazprom Neft reduced gas production to 2.34 billion cubic meters, which is 18% less than a year earlier. In January-April, the company’s production fell by 18.4%, to 9.4 billion cubic meters.

The largest independent producer NOVATEK slowed down the pace of production growth. In April, its production increased by 1.6%, to 6.8 billion cubic meters of gas (against 6% year-on-year in March), in the first four months of 2023, production remained approximately at the level of last year – 27 billion cubic meters. The reduction in production is being carried out by Yamal LNG, weak dynamics are also at Yargeo and Yurkharovneftegaz.

Rosneft continues to increase production due to the increase in the capacity of Rospan and the Kharampur field. In January-April, the company produced 26.2 billion cubic meters of gas, which is 76% more than a year earlier; in April, the company’s production increased by 83%, to 6.44 billion cubic meters. “Rospan” in the current year will reach the “shelf” of 21 billion cubic meters. At the same time, the company continues to burn large volumes of associated gas and has one of the worst APG utilization rates in the industry, Vitaly Ermakov notes.

The production of other large oil companies has leveled off, which in March, against the backdrop of a reduction in oil production, showed a negative trend in gas production as well. In April, LUKOIL increased gas production by 2.5%, to 1.5 billion cubic meters, but over four months, production decreased by 1.8%, to 6.2 billion cubic meters. In April, albeit symbolically, Tatneft and Bashneft increased gas production. Surgutneftegaz reduced production in April by 13.4%, to 604.4 million cubic meters, in January-April – by 14.3%, to 2.45 billion cubic meters.

Sergei Kondratiev of the Institute of Energy and Finance recalls that March was the last month when the high base effect of last year was in effect. Thus, in March 2022, production increased by 1% year-on-year, reaching the highest levels over the past three years. But already in the second quarter of 2022, gas production began to fall due to reduced demand in foreign markets, and in June-September 2022, the decline already exceeded 20%. In the coming months, the dynamics of production, according to him, will be determined by the base of last year, and in May we can see a slowdown in the decline to 5-6% yoy, and in June — “stabilization” at the low levels of summer 2022.

Tatyana Dyatel, Dmitry Kozlov