VLADIVOSTOK: Russia could increase its oil output by a third to over 14 million barrels per day (bpd) in the next two decades, it’s most powerful oil executive said as Moscow targets growing Asian markets.

Russia is already the world’s top oil producer, steadily pumping near its post-Soviet highs of 10.7m bpd thanks to the weak rouble which offsets the impact of low oil prices by reducing production costs.

A proposed increase in Russia’s oil production signals Moscow would not act to support falling prices, a stance similar to Opec, in a move to defend its market share.

“Our position is that Russian annual oil production in the future may reach 700m tonnes (14 mln bpd) and higher,” Igor Sechin, Chief Executive of the world’s top listed oil firm by output, Rosneft, told the Eastern Economic Forum.

To reach the goal and beat Soviet records of over 11m bpd reached in late 1980s Russia needs to increase exploration drilling, boost hard-to-extract resources and speed up development of Arctic offshore, Sechin said.

Russia’s rapid turn to Asia comes at a time when ties with the West are at their lowest point since the Cold War because of the conflict in Ukraine. Russia is under sanctions, which also ban western firms from helping to tap Arctic offshore and shale oil resources. Russia plans to at least double its oil and gas flows to Asia over the next 20 years, sending at least a third of its oil and a third of its gas eastwards by then.

That is a swing away from traditional westward routes that date back to Soviet times when Europe was the only market capable of absorbing Russian energy.—Reuters

Published in Dawn, September 5th, 2015

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