Oil production output will not fall in 2015

Russia’s second-biggest oil producer Lukoil, a target of US sanctions over the Ukraine crisis, will not cut domestic oil output next year but will invest less money in projects, its chief executive said. Sanctions are also limiting Lukoil’s ability to borrow on Western markets.

“Oil production in Russia will not fall next year,” Vagit Alekperov, Lukoil’s chief executive, said. Lukoil’s domestic oil production in August was 7.355 million tonnes, or 1.74 million barrels per day.

US has imposed sanctions on leading Russian energy companies including Gazprom, Rosneft and Lukoil, preventing US firms from supporting their activities in exploration or production from deep water, Arctic offshore or shale projects.

Lukoil has earmarked $20 billion in investments for this year, with the bulk of spending set to go to the huge West Qurna-2 field in Iraq. The company is also set to start production from an offshore field in the Caspian Sea next year.

Alekperov said that Lukoil’s offshore projects in the Caspian Sea and Ghana should not be affected by sanctions. The company is evaluating the implications of Western sanctions on its joint venture with France’s Total, he added.

Lukoil was planning to explore for tight oil in Siberia with Total.