Rosneft CEO: US oil output growth raises questions over OPEC+ deal

ST. PETERSBURG, Jun 4 (PRIME) -- The U.S. is preparing to increase its oil production, which raises the question about the efficiency of the OPEC+ oil output reduction deal, Igor Sechin, CEO of Russian oil major Rosneft, said on Tuesday during an annual general meeting of the company’s shareholders.

“A decision to prolong the (OPEC+) deal until the end of the year has not been made so far. But I would like to point out this: U.S. analyst data show that the U.S. is preparing 49 new shale oil projects. The Americans are going to raise their production. Is there any reason for us to cut production if the U.S. companies will replace it and simply take the market share,” he said.

Still, Rosneft will comply with the deal if it is prolonged, but will discuss possible compensations of losses with the government if the losses emerge, he said, adding that the company did not plan to delay any projects due to the deal.

Russia should protect its share on the oil market.

“Of course, we have to protect our market share, especially since we have encountered technological problems of Transneft and already have export shortfalls to Western Europe. The situation begs for a decision to protect our oil industry in this competition,” he said.

In November 2016, OPEC and non-OPEC states including Russia first agreed to reduce their oil output to rebalance the market. Earlier in December 2018, the participants of the deal decided to cut production by an additional 800,000 barrels per day for OPEC and 400,000 barrels per day for non-OPEC states, including 230,000 barrels per day for Russia, from the level of October 2018.

The further fate of the oil production cut agreement was expected to be defined at OPEC and OPEC+ meetings on June 25 and June 26, respectively.

End