UPDATE: Lukoil CEO doesn’t see oil price growth to $100/bbl

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ST. PETERSBURG, May 29 (PRIME) -- Vagit Alekperov, CEO and co-owner of Russian oil major Lukoil, does not expect oil prices to grow to U.S. $100 per barrel, he told PRIME on Tuesday.

“I do not think that there will be such a high price, because the price is now regulated by a reduction that was reached by the OPEC+ agreement. It is being regulated by those statements that come from the U.S. on limiting oil exports from Iran. A sharp reduction of Venezuela’s production. These are those factors that can be changed today,” Alekperov said.

Oil prices renewed 4-year highs in April and May. The Brent oil price exceeded the psychological level of $80 per barrel on May 17 for the first time since November 25, 2014, but in late May oil prices fell significantly on reports about potential softer terms of the OPEC+ deal. On Tuesday, the Brent oil price trades around $75.4 per barrel, and WTI price at around $66.4 per barrel.

Lukoil expects that OPEC+ will make the oil production cut agreement flexible in June – will increase oil production at growth of prices and reduce if prices fall, Alekperov also said.

In November 2016, OPEC and non-OPEC states agreed to reduce their oil production to rebalance the market. Russia joined the agreement in December 2016 with a promise to cut output by 300,000 barrels daily compared with the level of October 2016. The agreement was prolonged until the end of 2018 in November 2017.

Alekperov also said he expects that the tax maneuver in the oil industry will be smooth and a tax burden on oil companies will not increase.

“Of course, this may negatively affect the companies’ economy, but I hope that in discussion of oil companies with the Finance Ministry and the Energy Ministry we will come to understanding that the tax burden should not increase. The good signal is that the government decided to lower excise duties – by 3 rubles for gasoline and 2 (rubles) for diesel fuel. This is a good signal for dialogue,” he said.

(62.2710 rubles – U.S. $1)

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