Vladimir Putin Explained the Reduction in Gas Production
Oil and gas revenues are lagging behind the plan, Siluanov said. Putin replied that although the price of gas “has dropped a little” and production is declining, the situation is “absolutely stable”
Russia has set a certain price for gas and reduced production, but these actions are connected with the need to maintain a certain price environment on world markets, President Vladimir Putin said at a meeting with government members.
At the meeting, Finance Minister Anton Siluanov noted that non-oil and gas revenues are growing as planned and that the agency expects “even a small plus” for the year. But problems with oil and gas revenues persist. “So far, we see that, taking into account the market situation, taking into account all these discounts, they are lagging behind the plan,” Siluanov said.
The President replied that, in general, the situation with the oil and gas sector is stable. Russia has set a certain price for gas, and it “fell a little”. The country is also reducing production, but “nevertheless, it is at the proper level,” Putin reassured.
“Prices fluctuate in world markets. But all our actions, including the voluntary reduction in production, are connected precisely with the need to maintain a certain price environment on world markets,” the president explained.
He said that Russia maintains contacts with partners in OPEC+. “On the whole, the situation here is absolutely stable,” Putin concluded.
According to Rosstat, natural gas production in Russia in the first quarter of 2023 amounted to 149 billion cubic meters. m – 14.1% less than in the same period last year. In March, 49.8 billion cubic meters were produced. m, 15.3% less than in the same month a year earlier, but 6.4% more than last February.
At the end of 2022, according to the Ministry of Energy, Russia reduced gas production by 18-20%, to 671 billion cubic meters. m, said Deputy Prime Minister Alexander Novak. This year, the country is also expected to decline, predicts the International Energy Agency: the fall in production in 2023 will be about 7.7%, to 620 billion cubic meters. m.
The fall comes against the backdrop of a significant reduction in Gazprom’s supplies to the EU after the start of a special operation in Ukraine. Deliveries pass only through the Turkish Stream and at a minimum level through Ukraine. There is no way to increase exports to the EU, since the Nord Stream gas pipeline system was blown up, and the Yamal-Europe pipeline is under counter-sanctions.
At the same time, exports to China are increasing. In January, it reached 2.7 billion cubic meters. m, which allowed Russia for the first time to come out on top among gas exporters to this country.
