According to the International Energy Agency, Saudi Arabia will overtake Russia as the world's largest crude oil producer in about 2015 as output at new Russian fields fails to offset fast decline at mature deposits.
In its World Energy Outlook the IEA also said Russia would eventually start to supply natural gas to China becoming a major source of the fuel despite gas export monopoly Gazprom's failure so far to secure a supply deal after five years of talks.
Russia overtook Saudi Arabia as the top producer of oil when the Organization of the Petroleum Exporting Countries cut crude output during the economic crisis in 2009. But while Russia's output will plateau at 10.5 million barrels per day, Saudi Arabia's will rise to match Russia's in roughly 2015 and hit 14 million barrels per day by 2035.
Until the end of last year, OPEC members agreed a series of targets for their own production in an effort to stabilize the world oil market. However, these production limits have largely been abandoned this year since Libyan output was interrupted.
Russia will see output fall to 9.7 million barrels per day by that date, provided it implements new stimulus measures for upstream production, the IEA said. The government forecasts steady output of roughly 10 million barrels per day until 2020. IEA figures are likely to be higher due to a difference in the basis for its calculations.
Russia where production peaked at 11.41 million barrels per day in 1988 under Soviet rule has driven output to post-Soviet highs above 10 million barrels per day by bringing new fields on stream but these will not prevent decline from setting in later this decade.
IEA said that Russian fiscal policy is a key determinant of when and how quickly Russian production will decline. Current terms limit the incentive to invest when prices rise our projections assume sympathetic evolution of taxation.
By 2035, Russia will still be the world's largest gas producer and natural gas exports should more than double to 330 billion cubic meters due to new deliveries to China.
Russia aims to start gas export to China by 2016 of as much as 68 billion cubic meters per year equal to nearly half of Europe's intake. But Gazprom officials have conceded that an agreement on Chinese supplies will not be concluded this year, implying a delay to the planned start to deliveries.
(Sourced from Reuters)
