Energy
0

Russia Has No Plan to Cut Oil Output

Russia Has No Plan to Cut Oil OutputRussia Has No Plan to Cut Oil Output

Russia, the world's biggest energy exporter, does not plan to cut oil production to shore up prices, Rossiya 24 television quoted Energy Minister Alexander Novak as saying on Saturday, Reuters reported.

Russia, which relies on oil and gas exports for about half its federal budget, has been hit this year by a fall in global oil prices as well as by Western sanctions over its role in the Ukraine's crisis.

Novak and Igor Sechin, chief executive of Russia's biggest oil producer Rosneft and an ally of President Vladimir Putin, will travel to Vienna next week before an OPEC meeting. They have not said who they will meet while there.

Russia can do little to shore up the oil price, which had fallen by a third since June to under $80 a barrel, because it lacks storage facilities and may be unable to stop pumping at wells for fear they will freeze over, analysts have said.

  New Energy Partners

Moscow will seek new partners in countries that have not imposed sanctions on it if Western oil and gas companies pull out of projects with Russia, RIA news agency quoted Novak as saying on Saturday.

The sanctions over Russia's role in the Ukraine crisis have targeted the delivery of oil technology, goods and services, aiming to make it harder for Moscow to access new oil sources.

"If (Western) companies decide for themselves not to take part in organising investment projects in the long term, we will invite investors from countries which have not imposed sanctions against us and our oil and gas companies," Novak was quoted as saying in response to a question at a meeting with students.

Russia, the world's biggest energy exporter, relies on oil and gas exports for about half its federal budget. The sanctions affect its offshore exploration in the Arctic and development of the hard-to-recover oil deposits.

US oil major Exxon Mobil has had to suspend work on offshore exploration in the Arctic with Russian oil producer Rosneft and Royal Dutch Shell has suspended development of hard-to-recover oil in Russia's Bazhenov formation with Gazprom Neft.

Rosneft has agreed to deepen cooperation with China National Petroleum Corporation, including in liquefied natural gas (LNG) projects and possibly LNG supplies to China.

 

Financialtribune.com