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. Last Updated: 07/27/2016

2002 Crude Output Hits a 10-Year High

Oil exports hit an all-time high in 2002 as oil majors sought new shipping routes for their output, which boomed for the fourth-straight year to reach a 10-year high.

Energy Ministry data showed that the world's second-largest oil exporter supplied 156.6 million metric tons (3.14 million barrels per day) of its own and transit crude from neighboring Azerbaijan and Kazakhstan to international markets, up from 3.01 million bpd in 2001.

Russia produced 379.6 million tons (7.62 million bpd) in 2002, up from 7.0 million bpd in 2001. Traders and industry analysts said they expected oil production to grow by another 5 percent to 8 percent in 2003, while limited export capacity would keep overseas crude oil shipments flat.

"We really need new oil export routes to avoid major domestic gluts such as in December 2001 and December 2002. But I'm afraid new export projects will be in place only after 2003," a senior Russian trader said.

However, he said producers could try to compensate for the problem by boosting exports of oil products, keeping up the pressure on rival OPEC producers.

CompanyOutputExports*
(non-CIS)
LUKoil75.4925.85
Yukos69.8925.62
Surgut49.2117.45
TNK37.5014.76
Sibneft 26.3310.49
Tatneft24.618.70
Sidanko**16.265.83
Slavneft***16.235.47
Rosneft16.116.06
Bashneft11.974.09
Gazprom10.770.14
*All figures are in millions of metric tons and do not include volumes exported in May and June under the government's secret program to finance the shutdown of a spy base in Cuba.
** TNK is the main shareholder of Sidanko.
***Sibneft and TNK own Slavneft as of December.
Source: Reuters


The trader said he saw the first direct crude oil shipments to the United States as one of the most important events of 2002 and a sign of increasingly friendly ties between the former Cold War foes after Sept. 11.

"These shipments are not yet very profitable and won't turn massive within the next few years. But the first steps were taken this year, including the Murmansk new port idea," he said.

Russia's four largest private oil majors joined forces in November to announce the construction of a huge outlet in the Arctic port of Murmansk to ship more crude to the United States and expand outside the country's traditional European markets.

Russia boosted seaborne oil exports in 2002 using new ports to ship its booming output, but was forced to cut pipeline exports to central Europe due to saturated demand.

Seaborne crude exports via the principal ports used rose nearly 9 percent in 2002 to 85.863 million tons from 78.911 million tons in 2001.

Traders said seaborne exports could increase further in 2003 if state pipeline monopoly Transneft implemented plans to boost capacity of its main Black Sea outlet, Novorossiisk, to around 50 million tons from 45 million this year. They said they were also waiting for Transneft to expand capacity at the newly built port of Primorsk, on the Gulf of Finland, to around 30 million tons from the current 12 million, and launch a new route to Croatia's Adriatic coast.

"We had major logistics problems in Primorsk immediately after the launch and we still face them. But the launch of this outlet in 2002, Russia's first in 10 years, is a huge success anyway," a Moscow-based Western trader said.

A senior Russian trader said Primorsk became a major port only after Transneft last year curbed its oil supplies to Latvia's Ventspils port, long the main outlet for Russia's crude to northern Europe.

"Ventspils is a big event to watch in 2003. I really doubt Russian private oil majors will hold their tongues for ever while Transneft artificially limits their exports," he said.

Transneft is interested in Ventspils, capable of exporting around 30 million tons of crude oil and refined products, but has said it was limiting crude shipments to the port as Russian oil firms prefer other routes, including Primorsk.

In December 2002, Transneft shipped only enough crude to Ventspils to fill one 100,000-ton cargo. That compared to the 10 to 15 monthly cargoes seen in previous years.

The monopoly said the port would not get any crude at all in January 2003.

Crude exports through the Druzhba pipeline to Germany, Poland, Hungary, Slovakia and the Czech Republic fell in 2002 to 55.717 million tons from 57.019 million in 2001.

They said they did not expect the situation on the Druzhba pipeline to change significantly in 2003 as Central Europe did not need additional Russian crude. "The only way to increase the use of Druzhba is to find more export outlets at its ends," said the Western trader.