Russia’s Rosneft says has flexibility on oil output levels

State-controlled Rosneft, which accounts for over 40 percent of Russian oil production, said its board has looked into plans for 2017-2018

By: Reuters | Moscow | Published:December 24, 2016 7:08 pm
RUSSIA, RUSSIA OIL, putin, Vladimir Putin, Vladimir Putin Rosneft, Rosneft, Rosneft oil, russia Rosneft, OPEC, russia OPEC, Igor Sechin, Igor Sechin Putin, Igor Sechin russia, latest news, latest world news File Photo: Rosneft CEO Igor Sechin (Source: Reuters)

Rosneft’s plans for next year allow it to be flexible with production volumes, Russia’s top oil producer said on Saturday, after Moscow clinched a deal with OPEC to cut production to bolster weak oil prices.

State-controlled Rosneft, which accounts for over 40 percent of Russian oil production, said its board has looked into plans for 2017-2018.

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“The plan is formed on the basis of actual long-term development programme and takes into account changes in Russia’s fiscal law and a possibility of carrying out a manoeuvre with the production volumes in order to boost sales efficiency in the first half 2017,” the company said in a statement. It did not mention the OPEC agreement and a spokesman declined to elaborate on the statement.

OPEC and non-OPEC producers, including Russia, reached their first deal on Dec. 10 since 2001 to curtail oil output and ease a global glut after more than two years of low prices. Russia, in line with the OPEC deal, will cut its oil output by 200,000 barrels per day (bpd) by the end of the first quarter. The decline will amount to 300,000 bpd thereafter from the level of 11.247 million bpd reached last October.

Rosneft’s Chief Executive Igor Sechin, a powerful ally of President Vladimir Putin, has been a staunch opponent of OPEC, saying that the group has lost its sway over global oil markets as shale oil production in the United States has risen dramatically over the past few years. In October, Sechin said Rosneft would not cap oil production as part of a possible agreement with OPEC.

Following the Vienna deal, Russia’s energy minister said on Dec. 14 he had reached a framework agreement with oil companies on how to implement an output cut, but the producers said there were still details to be worked out. There are doubts that Russian oil companies, with their own interests and plans, will be able to hammer out a joint strategy to cut the country’s production, which has reached a post-Soviet high.

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