By Greg Walters
October 2, 2008 (Update1)
SourceOct. 2 (Bloomberg) -- Russia's oil production fell for the ninth straight month in September as producers struggled with rising costs and maturing fields, bringing the world's second- biggest crude exporter closer to its first annual drop in output since 1998.
Production fell 0.4 percent to 9.83 million barrels of crude a day (40.2 million metric tons a month) compared with a year earlier, according to figures released by the Energy Ministry's CDU-TEK unit.
Output in Russia's oil heartland of western Siberia is flagging as older fields mature and companies invest in harder- to-reach regions to tap deposits. In July, parliament approved tax breaks championed by Prime Minister Vladimir Putin to spur investment in national production.
``Right now the tax regime favors only highly-productive wells,'' said Chirvani Abdoullaev, an oil and gas analyst at Alfa Bank in Moscow. ``Will the tax changes really incentivize companies to drill less-prolific wells? I'm not sure.''
Total exports fell 10 percent year-on-year to 5.14 million barrels a day. Exports via OAO Transneft, the country's crude oil pipeline operator, slid 9.1 percent to 4.13 million barrels a day from last year.
Russia's sliding crude export duty, which rises when oil prices are higher, leaves less money to develop harder-to-reach deposits. Putin said in May taxes took as much as 80 percent of profits.
The world's largest crude supplier is Saudi Arabia.
To contact the reporter on this story: Greg Walters in Moscow
gwalters1@bloomberg.netLast Updated: October 2, 2008 05:12 EDT