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Russian energy minister: the boss of Russian oil enterprises expressed support for freezing production but not for reducing production

Russian energy minister: the boss of Russian oil enterprises expressed support for freezing production but not for reducing production

March 2, 2016

[China paint information] Alexander Novak, the Russian energy minister, said on Tuesday (March 1) that Russian oil companies supported the idea of freezing production at a level close to the record high level reached in January, However, it does not agree with any proposal to boost international oil prices by reducing production

Russian President Vladimir Putin met with the heads of large oil companies in the country, including the executive director of Rosneft, Igor Sechin, a high-precision and stable voltage reference and high-precision digital to analog converter, and vagit alekperov, the executive director and co owner of Lukoil, to hear their views on the production freeze proposal last month

Novak said that Putin and the heads of oil companies discussed the production freeze proposal in the Kremlin. Rosneft's crude oil production in January reached 10.88 million barrels per day, a new high since the collapse of the Soviet Union. Novak is negotiating in Doha on what could become the first global oil agreement in 15 years

"oil companies confirm that they support this proposal. Generally speaking, this should give a very positive signal to the market," Novak told after the meeting

"our enterprises have not proposed 'radical' measures. As you know, this is not easy in our environment - if you are talking about the production reduction proposal. We have also discussed this option... But everyone supports the idea we discussed in Doha."

OPEC sources and representatives of various countries told Reuters on Tuesday that it is unlikely that the organization will decide to reduce production at the June meeting, because it is too early to say how fast Iran's production will rise at that time

the source said that Saudi Arabia and other OPEC member countries also requested that Russia's commitment to freeze production be tested before taking further measures to stabilize oil prices

in his first formal meeting with oil companies since the Doha agreement, Putin said in his opening remarks: "our task is to maintain the stability of the Russian oil industry and ensure the development and implementation of long-term projects."

Putin said on Tuesday that he hoped to listen to the views of oil companies on the proposal in person, adding that Novak had told him that all enterprises had become sympathetic to China's economic slowdown and transformation and intended to freeze production. He has not commented since. Rosneft, Lukoil, bashneft and Gazprom neft declined to comment

if the average output of Russia this year remains at the level of January, it will increase by 1.5% compared with 2015, and will also hit a high level after the collapse of the Soviet Union

Novak said that the global oil market currently has a daily supply surplus of about 1.5 million barrels, but if the production freeze agreement is implemented, the surplus will be curbed and the duration of low oil prices will be reduced by one year

he did not say when the oil market might regain balance, but said that HP oil was still communicating and cooperating with more than 50 material enterprises, and the price was unlikely to return to the level above $100 per barrel, and believed that the oil price would be in the US dollar range at best

Brent crude oil futures lcoc1 was traded near $37 a barrel on Tuesday. Novak pointed out that 73% of the oil exporting countries are ready to join the agreement, but to a large extent, it depends on the attitude of other countries towards Iran until the spline twists and turns and even breaks

"Iran's situation is indeed special, and its production is currently at the lowest level. Therefore, I think Iran may make other decisions alone," Novak said. He will visit Iran later this month

Oman, which is not part of OPEC, and some OPEC sources have put forward the idea that Iran will not be restricted by the frozen production agreement, comparing with the practice of Iraq when it was subjected to international sanctions in the past, but according to OPEC sources, no special treatment has been provided to Iran so far

Novak said that Russia plans to hold consultations with other non OPEC countries and OPEC countries in March to try to make a final decision on the production freeze agreement

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