Russian Oil Production May Decline Amid Low Prices, Investment Fall

According to Russian deputy prime minister, Russia will not increase oil production due to the current oil prices as the volume of investments in difficult-to-access reserves and some new projects is naturally declining.

MOSCOW (Sputnik) — Oil production in Russia could decline in light of the current prices and the decline of investment, Russian Deputy Prime Minister Arkady Dvorkovich said Tuesday.

"It is quite possible that if the oil prices remain low for a long time, there will be a certain decline in production, as it has been before," Dvorkovich told reporters, noting, however, that a major decline is unlikely.

"With the current oil prices, the volume of investments in difficult-to-access reserves and some new projects is naturally declining, and this will certainly not be followed by an increase [in oil production]," he said.

Earlier in August, Russian Economic Development Minister Alexey Ulyukaev said the average price of Russian export blend crude oil, known as Urals oil, was expected to hover around $52 per barrel until the end of 2015, with a slight increase from $55 per barrel in 2016 rising to $60 in 2017-2018.

Current global oil prices have almost halved compared to those seen in the summer of 2014, dropping from $100 to $53 per barrel for Brent crude, as of Tuesday — primarily as a result of worldwide oversupply.

According to the International Energy Agency (IEA), global oil prices will fall further in 2016 in response to decreased demand.