Russian oil producer adds to global glut

MOSCOW, Nov. 23 (UPI) -- Russian oil producer Gazprom Neft added to the oversupplied market, saying its output for the first nine months of the year increased more than 20 percent.

Crude oil prices are 45 percent lower than at this time last year in part because the increase in global production is more than a weakened economy can absorb. That's hurt economies like Russia, whose finances depend in part on export revenue.

Gazprom Neft, a division of Russian energy giant Gazprom and the country's fourth-largest crude oil producer, said production volumes of 436.4 million barrels of oil equivalent represented a 22.2 percent increase year-on-year. The company credited the gains in part to an increase at its arctic Prirazlomnoye field.

The company reached a milestone at the field in September 2014 with the production of its 1 millionth barrel of oil. After tapping the second production well in August, Gazprom Neft said the oil field, located in the Pechora Sea, should eventually double the full-year 2014 production level of 2.2 million barrels.

Sales for the oil arm of Gazprom were down less than 1 percent from last year, a drop the company attributed to declining oil prices. Net income fell 6.2 percent to $2 billion for the first nine months of 2015.

"The negative impact of foreign exchange rate differences in loan revaluations held back net income growth," the company said.

Sanctions and macroeconomic pressures had a negative impact on the value of the Russian currency, the ruble.