Russia’s oil output fell close to a three-year low in early July, amid a row between oil pipeline monopoly Transneft and Rosneft, the country’s biggest oil producer, RIA Novosti reports.
Rosneft said that the pipeline company hurt its production by curbing oil intake from Yuganskneftegaz, the oil producer’s main upstream unit. The subsidiary has already been depressed by an oil contamination crisis earlier this year.
Industry sources told Reuters that Russian oil output fell to 10.79 million barrels per day (bpd) in early July, meaning output is lower than the level agreed under a deal on curbing supply reached with OPEC and other producers.
Transneft and Rosneft have been at loggerheads over efforts to resolve the problem of contaminated oil found in April in the Druzhba export pipeline to Europe. Supplies have only partially resumed since then, after weeks of disruption.
Transneft criticized Rosneft on Monday over its handling of the tainted oil issue, saying the oil producer had dragged its feet over setting up quality controls for its oil and had made unsubstantiated claims from the pipeline firm.
Rosneft said it had read Transneft’s remarks with “regret”.
The heads of the two firms, Rosneft’s Igor Sechin and Nikolai Tokarev at Transneft, have often rowed in the past. Despite formally denying any strife between their CEOs, the two companies have often clashed over issues such as oil transportation fees and Rosneft’s rising oil exports to China.
Sechin, 58, has been close to President Vladimir Putin for two decades, while Tokarev, 68, is also a long-time ally. Putin, Tokarev, and Sechin all worked in the city administration for St Petersburg in the 1990s after the collapse of the Soviet Union.
When asked to comment on the row, Kremlin spokesman Dmitry Peskov told reporters on a daily conference call that it was a “corporate matter”.
Transneft transports 83% of Russian oil via its network, while Rosneft accounts for over 40% of Russian output.
