Russian oil producer Tatneft has reduced its production by around 20% this month ahead of output cuts by global oil producers due to full storage capacity and weak demand in Europe, Reuters reported, citing sources familiar with the matter.
Earlier this month, Russia and other oil-producing nations within OPEC+ agreed to cut supply by 9.7 million bpd for May and June. Russia has asked producers to reduce supply about a fifth from May 1. However, Tatneft had already cut production because the mid-size company mostly provides crude oil to Europe where demand has collapsed.
Tatneft produced nearly 600,000 bpd of crude oil from Tatarstan in central Russia in the last couple of years. According to preliminary data from the Russian energy ministry, production fell to 480,000 bpd in April. This marks the lowest output by Tafneft since the early 2000s.
According to the sources, Russia is focusing on mainly mature fields, when investments have been mostly returned, to implement the output cuts under the global agreement. Russian producers will perform a mix of stopping wells for repairs, conservation, and limiting new drilling to fulfil its promised production cuts.
