By December 7, 2016 Read More →

Russian oil firms discussed output cuts, no quota recommendations

Russian oil

Heads of Russian oil companies met with Energy Minister Alexander Novak prior to a meeting where Russia and OPEC will finalize an oil supply cut deal in Vienna on Saturday. Reuters photo by Sergei Karpukhin.

Russian oil companies to join cut in equal percentages

By Denis Pinchuk and Oksana Kobzeva

MOSCOW, Dec 7 (Reuters) – Russian oil companies support Energy Ministry proposals to cap oil output as part of a global deal, a ministry spokeswoman said on Wednesday as Moscow prepares to finalise the agreement with OPEC and other producer nations this weekend.

The chiefs of Lukoil, Gazprom Neft, Tatneft, Novatek and Surgutneftegaz met Energy Minister Alexander Novak for around an hour. Novak plans to visit Vienna on Dec. 10 following OPEC’s output decision last week.

Rosneft, Russia’s top oil producer, was represented by vice-president Andrei Shishkin, recently appointed head of Bashneft. CEO Igor Sechin, Russia’s most powerful oilman and critic of cooperation with the Organization of the Petroleum Exporting Countries, was absent.

“All companies have supported our proposals for an oil production cap,” Olga Golant, spokeswoman for Novak, told reporters after the meeting. She added that Novak would comment on details in Vienna.

Russia, whose oil output hit a post-Soviet high in November at 11.21 million barrels per day, has committed to cut 300,000 b/d during the first half of next year. Other non-OPEC nations are expected to match Moscow’s cut in total.

Vladimir Bogdanov, head of Russia’s third-largest oil producer, Surgut, said a production cut had been discussed at the meeting with Novak.

Vagit Alekperov, chief executive of No.2 oil producer Lukoil, said no decision had been taken yet on how to reduce production. He added that the ministry had not issued recommendations on quotas for the cut.

Last week, Novak said all Russian companies would join the cut in equal percentages, but did not elaborate. Kazakhstan and Azerbaijan, the second- and third-largest producers among ex-Soviet countries after Russia, plan to attend the Vienna talks.

On Wednesday, Kazakhstan officially relaunched its giant offshore Kashagan field, which is expected to produce 8.9 million tonnes of oil in 2017 (about 192,000 b/d).

Formerly Soviet Turkmenistan does not plan to attend “because Turkmenistan is not a major producer”, a government source told Reuters.

(Additional reporting by Marat Gurt and Mariya Gordeyeva; Writing by Polina Devitt and Katya Golubkova; Editing by Dale Hudson)

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