Russia's Gazprom Neft to restart idle oil wells in West Siberia

Russia plans to raise its production by 125,000 bpd

  

MOSCOW- Russia's Gazprom Neft will start raising oil output by restarting mothballed oil wells in West Siberia in line with output plans agreed by the OPEC+ group of oil-producing nations, CEO Alexander Dyukov said on Tuesday.

Russian oil producers have idled a significant number of wells to comply with massive output cuts under a global production deal.

The Organization of the Petroleum Exporting Countries and other large oil producers led by Russia, a group known as OPEC+, agreed to cut their combined oil output by 9.7 million barrels per day (bpd) in May-July to combat oversupply triggered by the economic fallout from the pandemic.

OPEC+ has said it will continue easing cuts from the record supply reduction by an expected 500,000 barrels per day in January, a decision welcomed by Dyukov.

Russia plans to raise its production by 125,000 bpd within that quota.

Dyukov said that the company, the oil arm of gas producer Gazprom, is likely to post a profit for 2020. Many oil producers have registered losses so far this year as oil prices and demand fell.

"Oil prices and the rouble rate will define if we end the year with an income," he said.

Gazprom Neft's net income plummeted to 36 billion roubles ($478.4 million) in the January - September period from 320 billion roubles in the year-earlier period.

Dyukov said global oil demand may return to pre-crisis levels by early to mid-2022.

($1 = 75.2540 roubles)

(Reporting by Olesya Astakhova; writing by Vladimir Soldatkin; editing by Jason Neely, Kirsten Donovan) ((vladimir.soldatkin@reuters.com; +7 495 775 12 42;))


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