Russia to produce over 450 mm tons of oil by yearend

Russia has produced 263 mm tons of oil over the 7 months of 2004. Viktor Khristenko, Russian Industry and Energy Minister, cited the figure at a meeting with President Vladimir Putin.
"We are expected to produce over 450 mm tons by the end of the year," said Mr Khristenko. This means Russia will produce by 30 mm tons more oil in 2004 than last year.

"You mean that Russian [oil] companies are boosting production?" asked the president.
"All Russian companies are boosting production," answered Viktor Khristenko. He named LUKoil, YUKOS, Surgutneftegaz and Rosneft among the leaders in oil production. "LUKoil, YUKOS, Surgutneftegaz, Rosneft and some others account for major increases in oil output. These companies have increased production considerably," said Mr Khristenko.

Mr Putin asked whether Russian oil exports had gone up too. The minister said all the 30 mm of extra oil output were supplied to world markets. Russia's overall crude exports are expected to reach 260 mm tons by the year's end, according to the minister.
"Indices over the 7 months confirm the forecast as some 150 mm tons of crude have been exported over the period," said Viktor Khristenko. "The growing production rates are largely due to the favourable situation on the oil market. The rates were stipulated in the optimistic version of [Russia's] energy strategy, which relies on high economic growth rate and a favourable situation on the oil market," added Mr Khristenko.

The material on the "oriental project", the Taishet (Irkutsk region) -- Nakhodka (sea port on the western coast of the Sea of Japan, 90 km east off Vladivostok) transit pipeline system, has been prepared and is being studied by experts, according to the minister. (The pipeline's design capacity is 80 mm tpy of oil. The project costs $ 12 bn).
"After the required expert analyses are done the government will consider the "oriental project" and adopt relevant decisions," said Viktor Khristenko.

In late April, Vice-Premier Alexander Zhukov said the government would select the route for the pipeline and take a relevant decision on the project's feasibility study before the year's end. Mr Khristenko mentioned the project for the construction of the Baltic Pipeline System (BPS).
"The BPS achieved the capacity of 50 mm tons [a year] 3 days ago," said the minister.
The final objective is to bring its capacity to 62 mm tons, according to Mr Khristenko.
"The relevant decision is being agreed on at the moment," said Viktor Khristenko.

The BTS' capacity increased by 20 mm tons over a year of its operation, according to the energy minister. Transneft chief Semyon Vainshtok told that his company was prepared to boost the Baltic system's capacity to 62 mm tons by 2005 if the Russian government issued a relevant instruction for the company in the first half of 2004.
"This decision has been adopted and submitted for the government's consideration," Sergei Oganesyan, chief of the Federal Energy Agency said. "I believe a relevant [government] resolution will be issued shortly," said Mr Oganesyan. Mr Oganesyan believes the oil company will be able to boost the BPS' capacity to 62 mm tpy in 2006.