Abu Dhabi: A top executive of Russia’s second biggest oil company dismissed a deal between Russia and Opec (Organisation of the Petroleum Exporting Countries) on freezing or decreasing oil production after the meeting in Doha failed to produce any results on Sunday.

Speaking to CNN, Chief Executive Officer of Lukoil Vagit Alekperov said there won’t be an agreement between Russia and Opec despite the fact that work on the coordination of activities is underway.” There won’t be a firm integration process between Russia and Opec because even during the Soviet era, the USSR wasn’t a member of Opec and didn’t coordinate its actions with Opec.”

Lukoil is the second biggest oil company in Russia after Rosneft. It has office in Dubai where more than 800 people work taking care of overseas operations.

Not catastrophic

Alekperov said nobody expected a breakthrough in Doha and the failure of the meeting is not catastrophic for Russia.

“We are waiting for oil prices to grow and Russian oil companies have already adjusted to low oil prices.”

The meeting in Doha was attended by eighteen oil producing countries including Russia and Saudi Arabia.

After marathon talks lasting more than 12 hours, it ended without an agreement after Saudi Arabia insisted that Iran join the deal to stabilise oil prices.

Saudi reversal

Edward Bell, commodity analyst at Emirates NBD said future cooperation between Russia and Opec countries will be tough to come by after the failure to reach a production freeze agreement at Doha.

“The apparently sudden reversal in Saudi Arabia’s position came as a shock to many of its fellow producers and it is doubtful that Russia would be prepared to make a deal if it feels positions towards the market can change so quickly,” he told Gulf News.

On Russia’s plans to increase production, he said Russian output continues to move higher than all expectations but moving as high as 12 million barrels per day may be a stretch too far in the current conditions.

“Russia’s oilfields are in need of investment which may only be forthcoming when oil prices are higher,” he added.

Investments

Meanwhile, Lukoil on Thursday announced the start of the construction of Kandym Gas Processing Complex (KGPC), a key production facility in development of the Kandym group of gas condensate fields located in the Bukhara Province in the south-west of the Republic of Uzbekistan.

Investments in the project are estimated at over $3 billion in total. The complex will include construction of a gas treatment plant capable of processing 8.1 billion cubic meters of gas per year, as well as a natural gas gathering system, which, at its peak, will comprise 114 producing wells, 11 well pads and 4 gathering stations.

Russia’s oil supply for March reached 11.03 mb/d, up by 30 tb/d m-o-m, following growth from some fields operated by Novatek, Bashneft, Gazpromneft and Tatneft, according to Energy Aspects.