Business | Oil & Gas
Russia rules out following Opec with production cuts
Russia, the world's second-biggest oil producer, will pursue an "independent" strategy on oil production, ignoring the Organisation of Petroleum Exporting Countries' moves to cut output, said Finance Minister Alexei Kudrin.
- Bloomberg
- Published: 20:03 November 9, 2008
New York: Russia, the world's second-biggest oil producer, will pursue an "independent" strategy on oil production, ignoring the Organisation of Petroleum Exporting Countries' moves to cut output, said Finance Minister Alexei Kudrin.
"The government isn't planning any restrictions of oil production in the near future," Kudrin, who also serves as deputy prime minister, said in an interview in Sao Paulo on Sunday. "We don't want to impose administrative barriers for restricting production. Oil businesses should estimate their own risks."
Venezuelan President Hugo Chavez said on October 28 he had asked Russia to work with Opec to reverse the slide in oil prices, which have fallen more than 50 per cent in the past four months. Opec, supplier of more than 40 per cent of the world's oil, announced production cuts during September and October and may say it plans a further reduction at a December 17 meeting in Algeria, Opec president Chakib Khail said Friday.
"Of course we expect decline of oil prices" through next year as economies of the biggest oil consumers, such as the US and European Union countries, may contract, Kudrin said.
Forecast down
Russia cut its forecast for the price of Urals, the country's major blend of oil, to $50 (Dh183.7) a barrel in 2009 on average, from $95 a barrel previously, Kudrin said. Urals crude traded at $55.71 a barrel on November 7, 61 per cent below its high of $142.50 in July.
"We are holding consultations with Opec and our representatives are present at the Opec meetings, because Russia is interested in learning about new technologies of oil production and ways of financing the development of oil fields," Kudrin said.
Russia's biggest oil-producing companies have private shareholders. The country's oil and gas pipelines are controlled by the state. "Unlike in many Opec countries, many of our oil fields are being developed by private companies," Kudrin said. "It's too early" to talk about whether Russia would consider becoming an Opec member during the next ten years, he added.
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