The head of the energy Ministry of Russia Alexander Novak told the details of the plan of Russia to reduce oil production in the framework of the reached on the eve of the agreement of OPEC. According to him, the energy will be all Russian companies – this issue was discussed with them and they have all supported this decision, reports TASS.
Production cuts will be made from January 1, 2017 (since the inception of the agreement of OPEC, joined by Russia). It will occur proportionally and gradually from the current level, which amounts to 11.2 million barrels per day.
A graph of the reduction in production is ready to begin meeting with non-member countries in the OPEC cartel, which is scheduled for December 9. In the future Russia will be ready to discuss the possibility of extending the period of reduction of oil production, the Minister said.
On the eve of 30 November, at the summit of OPEC in Vienna, the cartel members agreed to cut oil production to 32.5 million barrels per day. Novak noted that Russia “will gradually reduce production in the first half of 2017, in the amount up to 300 thousand barrels per day”.
Prior to that, he explained that earlier, Moscow had planned in 2017 to increase oil production in the same volumes, so that, in fact, it turns out that it now simply abandon these plans and freeze the prey. Source Reuters in the Ministry of energy of the Russian Federation stated that the proposal for OPEC to cut production in Russia by 0.5 million barrels a day in the office considered excessive.
Agreement of the OPEC countries has already had a positive impact on oil prices. Meanwhile, some analysts believe that the chances of the practical realization of transactions on the restriction of the oil production is close to zero, according to “Expert”.
As for Russia, in recent months, the extraction of “black gold” in the country reached a record level. In winter, close existing wells will be extremely difficult, so the production cuts will take time and in fact may be less than the stated energy Minister Alexander Novak 300 thousand barrels per day, says the publication.
In addition, according to the author, “we cannot say that Russia has a serious motivation to adhere to the terms of the agreement: the effect of a small increase in prices for the budget will not be too significant, while producers get a profit at current prices”.