Russia’s top producing oil region in Western Siberia is expected to cut production by 15% in line with the OPEC+ cuts, according to Reuters.
Sergei Filatov, head of the regional government’s natural resources department, told Reuters a preliminary estimate showed the result for his region would be a 15% fall to 4 million barrels per day (mmbbl/d) for 2020. However, due to the disproportionate tax burden, it is expected that the production cuts should be evened out accordingly.
“We hope that (the oil output fall of 15%) won’t be that big and that the cuts would be partially taken by… other regions with a smaller tax burden,” Filatov said.
Khanty-Mansiysk in western Siberia accounts for a little under half of all oil produced in Russia and is set to take the biggest cut respectively. Russia’s energy ministry instructed oil companies in April to cut production by 20% each with no exceptions.
Russia agreed to sign an OPEC+ deal that would effectively remove 10 mmbbl/d from global markets.