Russia's Rosneft says managing exit from OPEC deal is a serious challenge

Russian Energy Minister Alexander Novak met Russian oil company executives in Moscow on Wednesday ahead of talks in Vienna at the end of November between OPEC and non-OPEC producers.

Representational Image: Photo: Pixabay

Russia`s Rosneft, the world`s top listed oil company by output, sees the exit from a global oil production-cutting deal as a serious challenge, a spokesman for the firm said.

Russian Energy Minister Alexander Novak met Russian oil company executives in Moscow on Wednesday ahead of talks in Vienna at the end of November between OPEC and non-OPEC producers.

The ministry said Russian domestic oil producers are committed to a global deal to cut oil output. It said Novak and the companies would continue consultations on the global oil market situation.

TRENDING NOW

Another meeting was scheduled in a week, oil company officials told reporters.

"The discussions are continuing," said Alexander Dyukov, the head of Gazprom Neft.

"The agreement that was signed and has been effective since July ... not so much time has passed since. That`s why we need to continue monitoring. We will gather in a week and will discuss."

The gathering in the Austrian capital could decide to extend the current deal further.

OPEC sources last month told Reuters that producers were leaning towards prolonging the agreement until the end of 2018, though the decision could be postponed until early next year depending on the market.

"Speaking about the company`s concerns, first of all it was about how to prepare for suspending measures to restrict production," said Rosneft spokesman Mikhail Leontyev.

"This is a serious question. Sooner or later, of course, these measures will be lifted. Now or later, that`s a separate question. It`s a serious challenge, for which one needs to prepare."

Rosneft is limiting output at its newest fields under the deal, in which Russia has pledged to cut production by 300,000 bpd. The Kremlin-controlled company accounts for about 40 percent of Russia`s total oil output.

Eric Liron, a first vice president at Rosneft, on Tuesday said that the company may delay some greenfield projects if the deal is extended beyond its March 31 expiry date.

Leontyev reiterated that Rosneft is sticking to its commitments under the pact but noted that Chief Executive Igor Sechin had expressed concerns over the deal.

Leontyev said Rosneft`s tactics towards the deal are being prepared jointly with the Russian state.

Russian President Vladimir Putin last month said that the pact was helping the global economy and should be extended at least until the end of 2018.

TAGS: