UPDATE: RussNeft to cut oil output by 200,000 tns under OPEC deal ‘17

(Adds comments in last three paragraphs)

MOSCOW, Jun 27 (PRIME) -- Russian oil company RussNeft plans to reduce output by 200,000 tonnes in 2017 under an oil production cut agreement between OPEC and non-OPEC states, but it won’t affect the company’s financial plans, President Yevgeny Tolochek said on Tuesday.

“Certainly, restriction of production has an impact on RussNeft’s output. We plan a reduction of output of around 200,000 tonnes in 2017,” he said.

The company is reducing production at low margin wells and starts developing high-margin reserves, he said. “Thus we keep our economic and financial indices unchanged, despite the fact that we will be short of 200,000 tonnes,” he said.

RussNeft will be able to restore production within a month after the production cut agreement expires, Tolochek said.

RussNeft co-owner Mikhail Gutseriyev said that Azerbaijan and Kazakhstan did not ask the company and other oil producing companies of the Gutseriyev family to reduce oil production on their territory.

“No, they did not ask. The volumes are small there. We produce 700,000 (tonnes of oil annually in Kazakhstan) – this is laughable for Kazakhstan and Azerbaijan, where production is almost 60 million tonnes. This is a lot for us, and for their market we do not play any role,” he said.

Tolochek said that RussNeft’s oil production costs amount to 3,300 rubles per tonne, which, according to Gutseriyev, is one of the lowest in Russia.

(59.0014 rubles – U.S. $1)

End