Russian-German joint venture hits oil production milestone

Wolgodeminoil, a joint venture between Wintershall and Russian energy company Lukoil, announced Thursday their effort over 5,200 square miles in southern Russia reached a production milestone with 73 million barrels at the beginning of August.

"Last year alone we produced around 3.8 million barrels of crude oil and about 4.6 trillion cubic feet of gas," Pavel Ivanov, the general director of Wolgodeminoil, said in a statement.

Over the next five years, the company scheduled seismic surveys over an area covering 650 square miles to get a better understanding of frontier reserve potential. As many as 20 exploration wells are scheduled over the same period.

Wolgodeminoil's current production comes from 12 fields. The company started work in southern Russia in 1992, becoming one of the first Western companies to enter post-Soviet Russia.

Russia is one of the largest oil and natural gas producers in the world. It's also the largest non-member state contributor to an effort led by the Organization of Petroleum Exporting Countries to balance the oil market with coordinated production restraints and sits on a committee monitoring compliance. That gives Russia considerable leverage over the global market.

Germany, meanwhile, is party to several efforts steered by Russian energy companies, a source of frustration for the United States in particular.

Wintershall is a member of the consortium working to double the capacity of the Nord Stream natural gas pipeline running through the Baltic Sea to Germany. The project is led by Russian energy company Gazprom, sending Russian gas to the European market while avoiding geopolitically sensitive territory in Ukraine.

Plans to double the network have been meet with concerns from the United States and Europe, who worry about Gazprom's anti-trust behavior and Russia's tacit strategy of using energy for political leverage.