Russian Oil: Cutting Against Projected Growth
Russia has pledged to opec and different Non-OPEC countries to cut its oil output by 300,000 bpd in the 1st six months of 2017 in a joint effort to reduce the world oil glut by nearly 1.8 million barrels a day. but contradictory and ambiguous statements created recently by the Russian Ministry of Energy and Russian oil companies raise some doubts on whether the Russians are very ready to carve out a joint course of action.
According to the announcement created by Russian Energy Minister Alexander Novak last week, the production cut are implemented gradually, and therefore the cutting ratios are apportioned to oil companies in line with their production volumes.
The senior executives of a few of the Russian leading oil-producing companies appeared to share a belief in creating deals with each other as an essential tool to implementing the strategy .
According to Ravil Maganov, Vice –President of Lukoil, no set unified quota on an output reduction per producer are established however. “Each company can have to decide for itself in accordance with its share on the market. the companies shall curtail their output taking into thought their specific position on the market,” stated the executive to press.
The Head of Gazpromneft, Alexander Dukov expressed optimism regarding the ability of the Russian oil producing companies to work out an agreement on specific reduction quotas with one another. “There are always options of making deals between the companies. the most important thing, is that the total output of Russia gets reduced by 300 thousand barrels every day, however we can kind the reduction scheme out between ourselves”, said Dukov.
It is noteworthy that despite Russia’s commitment to reduce output, Gazpromneft still forecasts the company’s production to grow in 2017. the company expects the 2016 results to reveal an 8 to 9 % year on year production growth compared to 2015, with the projected output to rise from 79.7 mln. tons to 86-87 mln. tons.