VIENNA, December 5. /TASS/. Lukoil oil major is ready to cut oil production if Russia agrees to do this as part of the OPEC + deal, the company's CEO Vagit Alekperov told reporters.
However, according to him, the company can cut production only gradually, because harsh weather conditions in Western Siberia hamper this.
"We have one limitation - the weather conditions in Western Siberia. Therefore, the ministry’s instruction (if Russia decides to cut production - TASS.) cannot be implemented right away. But, of course we can do it gradually," he said.
He also said that his company believes that if OPEC+ decides to cut oil production Russia should be given the opportunity to do it gradually.
"The reduction should be smooth, just like last year," he said. At the same time, Alekperov did not say how quickly this could happen.
Russia, together with Saudi Arabia, plays a key role in the OPEC+ agreement. Earlier Bloomberg reported with reference to anonymous sources that Russia was ready to reduce output by around 150,000 barrels per day next year. According to TASS sources, the Russian Energy Ministry and Russian oil companies earlier agreed on "purely symbolic" cuts.
The two nations signed to the biggest oil output reduction commitments during the first round in 2017. Last summer, they had to make an u-turn and started to boost oil extraction to compensate for a possible market deficit caused by falling production in Iran and Venezuela.
However, oil production in Iran and Venezuela has been on the increase in the past six months. Besides, Washington’s anti-Iran sanctions turned out to be not as strict as expected and the US virtually allowed Tehran to export crude to its biggest buyers, India and China, as well as to other Asian and European countries. Therefore, the market is now facing oversupplies rather than deficit.
In addition, Iran earlier announced that it was not going to reduce its oil production. Iran’s OPEC governor, Hossein Kazempour Ardebili, told Reuters on Monday that OPEC members who had earlier increased their output should now take the lead on cuts.
However, Russia has so far failed to support Saudi Arabia’s proposal to reduce oil production by at least 1 million barrels per day.
The talks in Vienna will continue on December 6, when OPEC ministers will sit at the negotiating table to consider the monitoring committee’s proposals and possibly approve them. Finally, non-member nations who are parties to the OPEC+ deal, will join the cartel for discussions on December 7. For the two years of the OPEC+ format’s existence, verdicts of ministerial meetings have always mirrored those proposed by the monitoring committee.