Why is Russia thinking of setting fire on its own oil?
The reserves of oil, which were once considered to be the biggest strength of a country, have become the same weakness in the era of Corona virus crisis. There is a lockdown in all countries around the world for the prevention of corona virus, which has led to a sudden drop in oil consumption. The oil reserves of many countries have also been filled as oil consumption decreased to record levels. In such a situation, now the oil producing countries are thinking that what should they do with their oil?
Russia is one of the world's leading countries in oil production. News agency Reuters quoted four sources related to the oil industry as saying, within a week, Russia will have to cut oil production by 20 percent under the agreement. Because of this, Russia is considering three options - repair oil wells, make arrangements to let the wells remain unoccupied for a long time or else set the oil on fire.
Russia has entered into an agreement with OPEC (Organization of Petroleum Exporting Countries) and non-OPEC countries to jointly remove 10 million barrels of oil per day from the global market to maintain equilibrium in the market. This will be a 20 percent reduction in the total oil supply. The agreement is to be implemented from May 1.
Russia Last week Report
Last week, Russia's energy minister asked oil companies to reduce their production by 20 percent to meet the target of OPEC Plus deal. Sources told the Reuters agency that companies are focusing first on the fields where production is already falling. Lukoil produces 1.65 million barrels of oil per day. Now Lukoil is planning to close many of its oil fields.
Slavneft, a joint venture of Rossneft and Gazprom Neft, is considering closing several fields of the Meganofetage unit in western Siberia. Two other sources associated with the oil industry said that oil wells with low production capacity can be closed first. However, to reduce the oil supply, the wells will be closed temporarily for repair instead of being closed indefinitely. Currently, drilling will also be halted to discover new petroleum mines.
Repairing oil wells will help companies to maintain their production capacity. Companies do not want to lose their profits for long. A source said, "It is true that there has been a decrease in demand but this cannot be the reason for locking oil fields. Sometimes it is better that you continue to produce oil and even burn it.Once the oil production capacity is exhausted, it takes many years to recover. You remember that once in the Soviet Union oil production was halved. It then took him a full decade to regain oil production capacity. "
The reserves of oil, which were once considered to be the biggest strength of a country, have become the same weakness in the era of Corona virus crisis. There is a lockdown in all countries around the world for the prevention of corona virus, which has led to a sudden drop in oil consumption. The oil reserves of many countries have also been filled as oil consumption decreased to record levels. In such a situation, now the oil producing countries are thinking that what should they do with their oil?
Russia has entered into an agreement with OPEC (Organization of Petroleum Exporting Countries) and non-OPEC countries to jointly remove 10 million barrels of oil per day from the global market to maintain equilibrium in the market. This will be a 20 percent reduction in the total oil supply. The agreement is to be implemented from May 1.
Russia Last week Report
Last week, Russia's energy minister asked oil companies to reduce their production by 20 percent to meet the target of OPEC Plus deal. Sources told the Reuters agency that companies are focusing first on the fields where production is already falling. Lukoil produces 1.65 million barrels of oil per day. Now Lukoil is planning to close many of its oil fields.
Slavneft, a joint venture of Rossneft and Gazprom Neft, is considering closing several fields of the Meganofetage unit in western Siberia. Two other sources associated with the oil industry said that oil wells with low production capacity can be closed first. However, to reduce the oil supply, the wells will be closed temporarily for repair instead of being closed indefinitely. Currently, drilling will also be halted to discover new petroleum mines.
No comments:
Post a Comment