Vienna – Non-OPEC oil producers were unlikely to improve their production over 2008, in a year when the market most needed their output to rise and make an considerable impact, analysts said on Wednesday.

Russia seems to bear the brunt of analysts’ ire. Kevin Norrish, commodities research analyst at Barclays Capital, said, “The latest data from Russia revealed that oil production was at 9.79 million barrels barrel per day (bpd), unchanged from 9.78 million bpd in January and down year-over-year for a second consecutive month.”

Norrish said disappointments were not limited to Russia as the recent flow of data suggests continued positive demand conditions yet parallel non-OPEC supply weakness.

Lehman Brothers forecast that non-OPEC supply was likely to record a growth of only 650,000 bpd or 1.3% in year-over-year terms, and would not do much to alleviate the burden on OPEC crude. Furthermore, 70% of the 650k bpd growth is coming from non-crude liquids such as biofuels, condensates synthetic crude and other conversion supplies, and only 30% from crude oil, according to a note issued by the investment bank.

Lehman believes that FSU growth, expected at 430k bpd, may make a strong contribution, but it merely offsets declines in the North Sea (-280k bpd) and Mexico (-180k bpd).

Deepwater tar sands were seen as crucial, as Brazil is expected to grow production by a further 270k bpd and an additional 170k bpd is expected from Canadian tar sands. Overall, 2008 could be the year for a “last hurrah” for the non-OPEC crude supply, but nothing more, Lehman said.

Looking beyond the figures, analyst Stephen Schork, principal author of The Schork Report, also feels that 2008 could have been a year for non-OPEC oil producers to prove their mettle, but the market must expect nothing more than the usual disappointments.

“To begin, nothing much has changed in Russia. The archaic infrastructure which Russia has is, in any case, detrimental to production. Furthermore, the country’s politics defies belief,” Schork told CEP News.

“In Vladimir Putin, the outgoing president, we have an ex-KGB man using oil as tool. The incoming president would not radically alter Russia’s position; at least we don’t see it happening. End result is that Russia, rather than supporting the oil market, wishes to use it for political gains,” he added.

Schork feels the worst point is that Kremlin’s politics stifle private sector investment into the Russian energy sector, which it badly needs. “End result is Russian oil and gas supplies remain as unreliable as their politics,” he added.

Looking beyond Russia, he felt many other non-members have not stepped up to the plate. “Mexican production has been constantly slipping. As a result, the Saudis and Venezuelans overtook them in terms of export volumes to the U.S. Canada remains at the top of the pile in terms of exports to U.S. but in terms of exporting beyond American shores and opening up inward investment into Canadian Tar sands go, nagging royalty issues predominate. Its Alberta provincial government has committed itself to improving things, but the market is yet to be convinced,” he concluded.