Lukoil will reduce production capacity due to protracted pandemic – top manager

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Lukoil has about 180 thousand bpd of free oil production capacity within the limits of OPEC +, but in the future the company will narrow its drilling programs. Azat Shamsuarov, first vice president of Lukoil, said this during a teleconference with investors.

“Due to the protracted nature of the pandemic, at the end of last year we decided to optimize the drilling program. This means that, according to our baseline plan, free capacity will gradually decrease due to the natural decline in production. Therefore, after the lifting of restrictions on the restoration of production to the levels of early 2020, it will take some time, ”he said.

At the same time, Shamsuarov added that the company has the necessary flexibility and will make a decision on production depending “on the pricing environment.”

According to the company’s presentation, 55% of vacant capacity is located in Western Siberia, 28% in Timan-Pechora and 12% in the Urals.

In total, since May 2020, the company has reduced 310 thousand bpd as part of the OPEC + deal, but as the restrictions eased, it has already restored 130 thousand bpd. According to Shamsuarov, the decline in production was carried out primarily at low-efficiency wells. The restoration process takes place regularly.

In total, the company plans to increase hydrocarbon production in 2021 by 2% in the current OPEC + conditions.

source: Russian  News Agency TASS