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MOSCOW, Mar 19 (PRIME) -- The Russian companies that lobbied secession from the OPEC plus deal did not expect "in their wildest dreams" an oil price of U.S. $25 per barrel, Deputy CEO of Lukoil Leonid Fedun told RBC in an interview published on Thursday.
"Although I know that some state companies aggressively lobbied it, even those who did so couldn't imagine in their wildest dreams selling oil at $25," the executive said, referring to Russia's quitting the OPEC plus deal.
According to Fedun, the oil price could be $20–25 higher but for the OPEC deal termination. "Yes, the coronavirus has hit the economy hard but the oil shock which we see now (from the split of the OPEC plus) produces a price that is $20–25 lower in our estimates."
Oil production in Russia can start to decrease in 2022–2023 even with incentives if the oil price remains below $35, Fedun said.
Lukoil is standing for the restart of negotiations with OPEC and Saudi Arabia. "But in order to do this we must defeat the pessimism of those who broke the deal," the official said.
In November 2016, OPEC and non-OPEC states including Russia first decided to reduce their oil output to rebalance the market, and agreed on additional reduction in December 2018. In July 2019, they prolonged the deal until April 2020. But on March 6, the countries failed to agree on parameters of the deal or on its prolongation, which resulted in a many years' record deep fall in crude prices
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