RUSSIA - Aug. 25 - Moscow Rises Oil Exports.

A report in the IHT says, "Russia, the world's second largest oil exporter, is increasing its production and export of oil, just as the OPEC is seeking to trim output... While OPEC has cut production quotas three times this year, or a total of 13 percent of daily output, Russia has increased production by 466,000 barrels a day, or 7 percent - faster than any other non-OPEC country". (Russia is the largest of the non-OPEC producers and is second only to Saudi Arabia overall). Exports are to increase as two new pipelines open additional routes to the Baltic Sea and Black Sea this year. Exports from Russia and Kazakhstan will increase by as much as 45% by 2005, according to estimates by Deutsche Bank AG. Adam Sieminski, senior oil analyst with Deutsche Banc Alex Brown in Baltimore, is quoted by IHT as saying exports from Russia "have been rising very rapidly. The last year has been a surprise in terms of the strength of production and exports from Russia. It's a fairly sizable number for OPEC to contend with". In a news conference last week, newly appointed Fuel and Energy Minister Igor Yusufov said Moscow would disregard OPEC views in deciding whether to increase exports. IHT quotes Mikhail Perfilov, an editor in Moscow for Petroleum Argus, as saying: "There will be a lot of Russian oil in the market over the next few years. Russian companies are eager to use every hole, every small terminal. They'll pump as much as they can, to enjoy prices while they are high". (The oil industry collapsed along with the Soviet Union in the early 1990s, with production declining about 40% between 1990 and 1996. But since the 1998 rouble devaluation slashed production costs and made exports even more profitable, oil companies have become cash rich. As earnings rise, helped by high oil prices, investment in the industry has jumped. Last year, investment was up 17% from the year before, the biggest rise in the 10 years of market changes). Deutsche Bank estimates that by 2005, oil production in Russia will have risen 25% compared with 1995. Next month, the Caspian Pipeline Consortium, a group owned in part by units of ExxonMobil and Chevron, will open a new line to bring oil from Kazakhstan to the Black Sea. Also, a pipeline linking the far north with the Baltic Sea port of Primorsk is to begin pumping in December. According to Petroleum Argus, the new projects will increase pipeline capacity by a third by 2005.