Minister: Russia ready to cut oil output by 300,000 bpd from 2017

VIENNA/MOSCOW, Dec 1 (PRIME) -- Russia welcomes an OPEC oil production cut agreement, and is ready to cut its own oil output by 300,000 barrels per day (bpd) gradually from 2017 if OPEC, including Indonesia, really decreases its daily oil production, Russian Energy Minister Alexander Novak told reporters late on Wednesday.

The OPEC countries agreed to reduce their daily oil production by 1.2 million barrels to 32.5 million barrels from January 1, 2017. The cartel said that output restrictions by non-OPEC countries will be necessary to rebalance the market, as the agreement provides for reduction of oil output by 600,000 barrels per day by non-OPEC producers.

“Russia will gradually cut the oil production in January–June 2017 by up to 300,000 barrels per day on a tight schedule assuming the technical capabilities,” Novak said.

“Our negotiations with non-OPEC countries allow us to count on some countries joining the agreement with a combined contribution to the production cut by about 300,000 barrels a day. Russia’s voluntary limitation of production is tied to OPEC complying with the level of 32.5 million a day including Indonesia, and the maximum possible participation of non-OPEC countries in this,” he said.

Qatari Energy Minister Mohammed Bin Saleh Al Sada said OPEC plans to meet with other oil producing countries on December 9 in Doha to discuss their joining the agreement to cut production by 600,000 barrels per day or even more.

The production cut exceeds the volume of excessive production of oil in the world significantly, which will help the market to rebalance faster, Novak added.

According to a statement published after the OPEC meeting, the organization has distributed the production cut levels among its participants, with Libya and Nigeria receiving no obligations and Indonesia temporarily terminating its participation in OPEC.

Saudi Arabia will cut is daily oil production by 486,000 barrels to 10.058 million barrels from January 1, 2017; Iraq by 210,000 barrels to 4.351 million barrels; United Arab Emirates by 139,000 barrels to 2.874 million barrels; Kuwait by 131,000 barrels to 2.707 million barrels; Algeria by 50,000 barrels to 1,039 million barrels; Angola by 87,000 barrels to 1.673 million barrels.

Daily oil production of Ecuador is to fall by 26,000 barrels to 522,000 barrels; of Gabon by 9,000 barrels to 193,000 barrels; of Venezuela by 95,000 barrels to 1.972 million barrels; and of Qatar by 30,000 barrels to 618,000 barrels.

But an OPEC representative said that Iran will be the only country to be allowed to increase production by 90,000 barrels a day to 3.797 million barrels.

Al Sada also said that the agreement will be in force for the next six months, and on May 25, 2017 OPEC will meet again and revise its actions.

OPEC also said in a statement that it sees international demand for oil rising by 1.2 million barrels a day in 2016 and 2017, while daily oil supplies of non-members will fall by 800,000 barrels in 2016 and grow by 300,000 barrels in 2017.

End