In 2015 Gazprom increased gas exports to the region by 8% compared with 159.4bn m³ in 2014. The latest official statistics also indicate that Gazprom's gas exports experienced significant growth in the first four months of 2016.

Oil output will reach 69 million tonnes of oil equivalent in 2016, against 67 million tonnes last year, while gas production will rise to 132.2 billion cubic meters (bcm) from 128.3 bcm in 2015 and 130.9 bcm in 2014, a Sonatrach report showed.

U.S. Rig Count is down 3 rigs from last week to 421, with oil rigs down 7 to 330, gas rigs up 4 to 90, and miscellaneous rigs unchanged at 1. Canadian Rig Count is up 7 rigs from last week to 76, with oil rigs up 8 to 36, gas rigs down 1 to 39, and miscellaneous rigs unchanged at 1.

U.S. crude was down $2.77 at $47.34 a barrel at around 0314 GMT. Brent crude was down $2.75 at $48.16 a barrel.

"Such huge outflows raise a question as to whether upstream business will generate enough cash, and where capex will figure in the priority order of companies," said Andrew Slaughter, executive director, Deloitte Center for Energy Solutions. "When we annualized operating cash flows of all the three company sets in 2015 for the next five years, assuming a $55/bbl average oil price, we see a total funding gap of up to $2 trillion from operations."

Global upstream development spending from 2015 to 2020 has declined 22%, or $740 billion, since fourth-quarter 2014. Including cuts to conventional exploration investment, the figure increases to just more than $1 trillion.

BP’s energy outlook this year foresees a compound annual growth rate of gas demand at 1.8% until 2035. In the OECD, this growth results from the coal-to-gas transition in power generation. The US major ExxonMobil supports this view, forecasting gas will account for 30% of the power sector and will equal coal by 2040.

It is absolutely compatible with the Energy Union. It will be sustainable, affordable and help security of supply, he said. It will increase liquidity in Europe but nobody will be forced to buy the gas, which will be priced against hubs.

"We have such low production costs that we will always be able to cut the selling price by a dollar or two when it comes to fighting off a rival," said a senior source at Gazprom.

It is absolutely compatible with the Energy Union. It will be sustainable, affordable and help security of supply, he said. It will increase liquidity in Europe but nobody will be forced to buy the gas, which will be priced against hubs.