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

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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.

Deputy Prime Minister Arkady Dvorkovich said that Russia will not lose its global market share if it abides by the agreement.

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.

Dvorkovich said that it will be difficult to fulfill the agreement. “It is quite hard to comment on that because everybody knows how the system works. It is hard both to settle things and to ensure implementation of the agreements. It does not mean it is impossible but of course, there will be difficulties.”

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