Russian oil production has peaked and may never return to 2007 levels, a vice president of Russia's second-biggest oil producer Lukoil, Leonid Fedun, said in a Financial Times interview. Fedun said he believed last year's production of about 10 million barrels/day was the highest he would see "in his lifetime".
Fedun likened Russia to the North Sea and Mexico, where oil production is declining sharply, saying that in its main oil-producing region of western Siberia, "the period of intense oil production (growth) is over".
The comments reflect a recent downward trend in the country's crude production, which has market analysts fretting about the possibility of a year-on-year decline in production for the first time since 1998.
Russia produced 491.48 million mt (9.83 million b/d) of crude in 2007, up 2.3% from 2006, according to the country's industry and energy ministry.
But in the first two months of 2008, average crude output fell 0.7% to around 9.75 million b/d, while in March it fell 1.2% to 9.72 million b/d.
A combination of high taxes and rising costs could lead to a further decline as they prevent producers from increasing investments as existing resource bases deplete, analysts said.
Source: Platts
