Gazprom Neft says on track to push hydrocarbons output over 100 mil mt in 2021

Russia's Gazprom Neft said Nov. 18 it would hit its long-standing goal of reaching annual hydrocarbons output of over 100 million mt of oil equivalent in 2021.

The company was seeking to reach this target despite oil production limitations under the OPEC + pact by diversifying gas and condensate portfolio.

The company's output of hydrocarbons totaled 96.1 million mt in 2020, or 1.95 million b/d of oil equivalent.

"For the full year, the company is expected to produce over 100 million mt of oil equivalent for the first time in its history, with further growth potential next year," CEO Alexander Dyukov said in a release.

Gazprom Neft "proactively" boosted hydrocarbons production in the third quarter, he added, amid recovering demand for oil.

In accordance with OPEC + efforts to counter the impact of the coronavirus pandemic, the company cut oil output to about 1.06 million b/d in May 2020, compared to 1.33 million b/d in April 2020, when the deal was not yet in effect, according to the energy ministry's data.

Dyukov previously said Gazprom Neft could increase oil output by over 10% in 2022, depending on quotas set by the Russian energy ministry.

Q3 results

In the third quarter, Gazprom Neft increased production of hydrocarbons to 25.6 million mt, or 2.05 million b/d of oil equivalent, up 5% on the quarter and 8.9% on the year.

"The increase was due to changes in restrictions on oil production under the OPEC+ agreement and growth of gas production volumes," the company said.

Under the OPEC+ deal, Russia has been increasing output by 105,000 b/d every month starting August, aiming to fully restore production to pre-crisis levels by May 2022.

The company's oil and condensate output rose by 1.5% on the quarter and 5.9% on the year to 115.23 million barrels in the third quarter due to easing of quotas.

Gazprom Neft saw its gas output grow to 420.86 Bcf in the reporting period, up by 10.9% on the quarter and 13.6% on the year.

The company increased gas output after commissioning of the gas processing line at the Vostochno-Messoyakhskoye oil field in mid-2020 and the launch of infrastructure at the oil and gas Tazovskoye field in June, as well as due to production growth at oil rim projects.

Gazprom Neft boosted its refining volumes to 11.77 million mt in the third quarter, up 10.2% on the quarter and 10.3% on the year on improved domestic demand for oil products amid gradual lifting of lockdown measures.

The company saw its revenue increase on rising oil prices, which have been on a growing curve throughout 2021.

S&P Global Platts assessed Russia 's Urals crude at $74.53/b CIF Med at the start of the third quarter on July 1, which reached $76.10/b by Sep. 30.