Minister: Russia may reach agreed oil output cuts by late Apr

HOUSTON, U.S., Mar 7 (PRIME) -- Russia has so far fulfilled around 50% of liabilities to reduce oil production and plans to lower the output by the agreed 300,000 barrels a day by the end of April, Energy Minister Alexander Novak said at a briefing during the CERAWeek energy conference late Monday.

“We are currently outrunning the planned oil output cuts and I expect we will reach the volume of 300,000 barrels daily by late April ... Today we have already reached around 50% of the agreed cuts ... and we will reach a higher level during March, so on average we will expect (reduction by) around 200,000 barrels,” Novak said.

OPEC states agreed to reduce their oil production by 1.2 million barrels daily to 32.5 million barrels in November 2016. Russia joined the agreement in December with a promise to cut output by 300,000 barrels daily compared with the level of October 2016. The agreement was concluded for January–June 2017 with potential prolongation.

Novak said it is early yet to speak about extension of the oil production cut agreement, but all of its participants are interested in a stable market.

Such an opportunity exists, but the decision on the possible extension of the deal will be taken later, he said.

Uncertainty on the global oil market remains despite the oil production cut agreement, the minister said.

“(As a result) of the agreement with OPEC, oil prices remain at one level over the past two to three months, but we understand that high uncertainty on the market exists, and this uncertainty is not reducing even despite the prices have stabilized,” Novak said.

The Energy Ministry expects that the oil price will stay at U.S. $55–60 per barrel in 2017, he said.

Russia is not currently considering joining OPEC, Novak also said.

“But our cooperation with oil exporting countries at this stage has proven the need for such interaction in terms of cooperation, and in terms of developing new technologies,” he added.

OPEC Secretary General Mohammed Barkindo told PRIME that OPEC was quite satisfied with interaction with Russia and receives enough support from the country despite the fact that it has no plans to become an OPEC member.

Novak also said that a meeting with investors from Wall Street was positive and the participants of the meeting asked questions regarding some certain projects.

“It was a closed meeting, though, in general, I can say that it was a very positive, business and constructive meeting. Foreign investors are very well aware of the situation in the oil and gas industry and economy in Russia. We discussed in detail all the raised questions,” he said.

Novak said that his meeting with Saudi Arabian counterpart Khalid Al-Falih was constructive, the sides have discussed the situation on the oil market and implementation of the oil production cut agreement, as well as future cooperation in the energy sphere.

Iraqi Oil Minister Jabar Ali al-Luaibi also told PRIME he plans to meet with Novak during the ongoing energy conference.

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