Russia Will Not Join OPEC

Russia Will Not Join OPECRussia Will Not Join OPEC

The Organization of Petroleum Exporting Countries has offered Russia to become its member, but Russia will remain an observer in the group, Rosneft CEO Igor Sechin said on Monday.

"The talks held between Russia and OPEC are rather positive and lead to an exchange of views. OPEC offered Russia to become a member," the CEO of Russian oil giant said at the FT Commodities press conference, TASS reported.

Sechin also said oil production in OPEC countries is in the hands of state-owned companies, while "Russia’s oil industry is private, which is unusual for OPEC states".

"Due to climate, Russia is unable to regulate oil production swiftly," he added. Taking into consideration differences in the conditions of production and ownership, Russia’s government agrees to have an observer status in OPEC, but "of course Russia cannot join it as a member-state due to the circumstances we have mentioned," Sechin noted.

"Lately, OPEC has lost the functions as a market regulator … There is no sense for Russia to join this organization."

  700m Tons of Oil

Russia's oil output may reach 700 million tons annually in the near future, Sechin said, adding that Russia will continue to drill at a normal pace.

"Drilling activity as a whole is maintained at a stable level."

Earlier, Russia’s Economic Development Ministry raised its assessment of oil production in Russia in 2015 to 530.5 million tons. Oil production in Russia in 2014 reached 526.7 million tons.

"Europe remains the key consumer of oil for Russia," Sechin said. "Certainly, Europe is the key consumer for us, but the growing market of the Asia-Pacific region is extremely attractive."

Rosneft also expects oil consumption to grow in China by 2% annually by 2020. According to Sechin, China earlier provided two-thirds of the global growth in oil demand, which figure now amounts to roughly 20-25%. "The Asia-Pacific markets in 2015 have a much greater degree of safety than, for example, in 1997-98," he said.