OREANDA-NEWS. January 14, 2010. The Russian Ministry of Energy has published its 2010 forecast for crude output, exports and refining volumes, reported the press-centre of OTKRITIE Financial Corporation.

The forecast assumes that total Russian crude production will increase by only 0.16% this year, to 495MMt (9.90MMBD), which implies a reduction in the average daily rate from the 10MMBD levels witnessed at the end of 2009.

Crude exports are projected to rise 0.39% to 247MMt (4.94MMBD), while throughput at domestic refineries is expected to increase by 0.95% to 238MMt (4.76MMBD). The Energy Ministry has also proposed the introduction of domestic refined product price formulas that would effectively link domestic wholesale product prices to export netbacks, adjusted for transportation costs (netback parity). 

View: The Ministry’s production forecast for 2010 appears somewhat conservative in our view, particularly since several major Russian oil companies have projected volume growth of 2% or more for 2010 (Rosneft, LUKOIL, and TNK-BP). From our standpoint, the forecast implies a faster decline in output rates at existing brownfields in western Siberia compared to 2009. In any case, we believe it would be premature to draw conclusions based upon the published forecast. As far as the refined product pricing proposal is concerned, we would point out that the average refinery-gate gasoline and diesel fuel prices were already close to their export parity levels in 2009. We therefore regard the news as neutral for the sector.