(Bloomberg) -- Russia will stick to its strategy of maintaining oil production and has no plans to take part in Friday’s OPEC meeting, said Energy Minister Alexander Novak.
“We don’t think cutting output is viable,” Novak told reporters in Moscow in response to questions about a report that Saudi Arabia would consider lowering oil production next year if certain non-OPEC countries follow suit. The nation will maintain output, he said.
Russia’s decision to hold course comes as the Saudi-led Organization of Petroleum Exporting Countries prepares to meet Friday almost a year after it sent global crude prices reeling by choosing to defend market share rather than cut output. The group of exporters seeks to rebalance supply and demand by pressuring higher-cost producers to curb production.
Energy Intelligence reported Thursday that Saudi Arabia may propose a 1 million-barrel-a-day cut in OPEC output for next year if certain conditions are met. Among those conditions are that non-OPEC producers including Russia, Mexico, Oman and Kazakhstan would have to participate. Saudi Arabia dismissed the report as “baseless.”
Russia doesn’t have the ability to adjust output like some OPEC members because of different climate conditions, Novak said. Additionally, the nation’s industry is private and companies make their own decisions based on markets, he said.
“We think that there is absolutely no necessity for Russian companies to artificially lower production,” Lukoil Chief Executive Officer Vagit Alekperov said in an interview with Bloomberg TV in Vienna today. Russia should concentrate on keeping output stable given the large number of mature fields, he said.
“We are continuing with our strategy to maintain the production level we have reached,” Novak said. “OPEC members are among countries that provide additional supplies to market, in particular Saudi Arabia, which in the past year has significantly raised output levels.”
-With assistance from Ilya Arkhipov.
To contact the reporters on this story: Stephen Bierman in Moscow at email@example.com; Olga Tanas in Moscow at firstname.lastname@example.org; Ryan Chilcote in London at email@example.com To contact the editors responsible for this story: James Herron at firstname.lastname@example.org Rachel Graham, John Deane
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