UPDATE: Russia’s Tatneft to cut output by 20,000 bpd in 2017

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MOSCOW/LONDON, Dec 12 (PRIME) -- Russian oil company Tatneft will decrease its production by 20,000 barrels per day (bpd) in 2017 in line with an agreement signed by OPEC and non-OPEC countries, Tatneft CEO Nayil Maganov told PRIME on Monday.

On December 10, non-OPEC countries coordinated an output reduction by 558,000 barrels, which includes Russia that agreed to cut production by 300,000 barrels. The agreement will be in force from January 2017 until the end of June with a possibility of prolongation.

“Our share in this story will be small, up to 20,000 barrels at most,” he said, adding that the ultimate figure will be defined after a meeting with the Energy Ministry this week.

“I think that we are having a general meeting this week, where we will find out and discuss everything. We have already formed special working groups that will monitor the situation and make necessary calculations. All oil companies will take the burden in proportion regarding the October level of oil production,” he said.

Still, the production cut agreement will have a positive impact on the company’s financial performance due to higher oil prices, he added.

Earlier on Monday, Tatneft said in a presentation that it may revise its oil production plan for 2017 down from the expected amount of 29.35 million tonnes due to a reduction agreement signed by OPEC and non-OPEC states.

The company also said in a presentation for analysts and investors that it preliminary plans to cut investment by 6% on the year to 100.3 billion rubles in 2017.

Tatneft said that investment in geological exploration may be decreased to 2 billion rubles in 2017 from 5.9 billion rubles in 2016, in production of super-viscous oil to 14.6 billion rubles from 23.5 billion rubles, into the Taneco refinery to 34.3 billion rubles from 34.8 billion rubles. But investments in production of hydrocarbons in the republic of Tatarstan may be raised to 31.8 billion rubles from 31.7 billion rubles, and other spending may grow to 17.6 billion rubles from 10.8 billion rubles.

(63.3028 rubles – U.S. $1)

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