COM - Gazprom Neft drilling budget up 50% - will Russian oil take market share next year

Gazprom Neft (OTCPK:GZPFY), the oil-producing arm of gas giant Gazprom, and the third largest oil producer in Russia, has plans to increase drilling activity by 50% yoy in 2022 according to production executive Sergey Doktor. With production up ~300kb/d of oil equivalent since 2016 to more than 2mb/d in Q3 2021, the Company now produces as much as the entire Bakken oil formation; since 2016 upstream investments have fallen at Gazprom Neft. Earlier this year, GZPFY indicated the Company could see 10%+ production growth in 2022. While oil bulls (NYSEARCA:USO) (NYSEARCA:XOP) (CL1:COM) (CO1:COM) are likely to argue that after adjusting for condensate production (excluded from the current OPEC+ agreement), Russia is under-producing it's quota, and losing production growth momentum; an indication that increased upstream investments are needed to sustain the production base. Conversely, bears point to excessive OPEC+ spare capacity as a long-term headwind to oil price, and see capex increases

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Gazprom Neft drilling budget up 50% - will Russian oil take market share next year