Deputy Minister: Russia plans to raise oil output 1.5% in 2016

KRASNOYARSK, Feb 19 (PRIME) -- Russia can fulfill a pact struck with Saudi Arabia to keep oil output at the level of January 2016 throughout the year and still raise production by 1.5% in 2016, Deputy Energy Minister Alexei Teksler told reporters on the sidelines of an economic forum on Friday.

“We meant that January’s output level will be frozen. It was higher than the average 2015 figure. We will make this figure clear definitely, preliminarily this is a little higher than 1.5% as compared with the previous year,” Teksler said.

On Tuesday, Russia, Saudi Arabia, Qatar and Venezuela agreed to keep oil output at January levels on average in 2016, if other producers join the initiative. On Wednesday, negotiations with Iran faced trouble because Tehran wanted to return to the pre-sanctions output level.

Teksler said that implementation of the agreement will reduce excessive oil supply by 50%.

“According to our estimates, whereas there is an about 1.8 million barrels of oversupply now, in case of a disciplined fulfillment of the agreement, about half of this excessive supply can disappear,” Teksler said.

He also said that the agreement fulfillment will have a strong effect on the market even if Iran decides against joining it.

The Russian oil industry can thrive even with oil prices at U.S. $35–40, he said.

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