End of OPEC+ deal will add 1% to Russian oil output, exports will grow faster - VEB
MOSCOW. March 14 (Interfax) - The expiration of the OPEC+ agreement to curb oil production will add a little more than 1% to Russian oil output, while exports will grow faster amid a decline in domestic refining, state bank VEB forecast.
"In the medium term, with the cancellation of the OPEC+ agreement, oil production volumes will grow by 6 million tonnes to 553 million tonnes and stabilize at this level. This will be facilitated by tax incentives for investment activity in geological exploration, the implementation of companies' ambitious plans to launch new fields and the development of difficult reserves," VEB said in a forecast for Russia's economic development in 2018-2021 published on Tuesday.
In 2018, taking into account the extension of the agreement, production will remain at the 2016-2017 level of 547 million tonnes, the bank said.
Exports, considering the decline of crude refining at Russian refineries, will increase from 256 million tonnes in 2018 to 269 million tonnes in 2021, largely on the back of exports to the Asia-Pacific region, VEB forecast.
Russia's refining sector in the medium term will see the acceleration of refinery modernization, while primary crude refining will drop from 280 million tonnes in 2018 to 273 million tonnes in 2021, VEB forecast. The depth of refining is expected to increase by 3.8 percentage points.
Exports of oil products will decrease due to limited demand in Europe, as well as the pursuit of fuel self-sufficiency policies by countries in the former Soviet Union. However, an increase in exports of certain oil products to local markets is possible, VEB said.
The launch of Sibur's ZapSib-2 petrochemical plant in 2019-2020 and Rosneft's Far East petrochemical project after 2020 will spur the growth of domestic demand for certain oil products, VEB said.