Gazprom Neft will increase its oil output by restarting mothballed oil wells in West Siberia and remain within the agreed output volume set by the Organization of the Petroleum Exporting Countries and its partners (OPEC+), Alexander Dyukov, Gazprom’s CEO, stated.
The OPEC+ output cuts have left several of Russia’s wells stagnant to meet the massive output cuts which led to significant financial losses for oil producers. Dyukov added that Gazprom, however, is likely to post a profit for 2020, although Gazprom’s net income plunged from 320 billion roubles in January-September of 2019 to 36 billion roubles in the same period this year.
The OPEC+ agreed earlier this year to cut their combined oil production by 9.7 million barrels per day (mmbbl/d) in May-July to balance the oil supply and demand equilibrium. The organization added that it will gradually reduce the cuts by about 500,000 bbl in January, a decision welcomed by Dyukov.
Gazprom’s CEO expects that global oil demand could return to pre-pandemic levels by early to mid-2022.