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Russian budget to remain unaffected by Iraqi violence — Finance Ministry official

June 17, 2014, 13:37 UTC+3 MOSCOW
The rebellion of fundamentalists in Iraq made the Brent price grow to $112.61 per barrel
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MOSCOW, June 17. /ITAR-TASS/. The Russian federal budget will remain unaffected by the turmoil in Iraq even if it pushes oil prices up, Maxim Oreshkin, long-term strategic planning department director of the Finance Ministry, said Tuesday.

“If we see that oil prices are higher than we forecast in our economic estimates, then the ruble has a high probability of becoming stronger than we used to think initially,” Oreshkin said.

“The influence of the Iraqi events on the Russian budget will be insignificant because most of the oil price changes will be compensated by the ruble volatility under the current foreign currency policies, which imply a high degree of exchange rate flexibility.”

The rebellion of fundamentalists in Iraq made the Brent price grow to $112.61 per barrel as of 12:07 Moscow time (08:07 GMT) from $110 a couple of weeks ago.

Russian oil company LUKOIL’s representative Gleb Ovsyannikov said that the company is still interested in continuing its projects in the country.

LUKOIL is in talks with the Iraqi government to build a pipeline going to an export hub on the Persian Gulf, Ovsyannikov said.

The seizure by militants of the north of Iraq last week did not hurt Gazprom Neft as its fields are located far from the areas hit by the military action although the situation is worrying, Deputy CEO Vadim Yakovlev said.

The company is elaborating plan B, which includes evacuation of workers and raising the security level if the crisis continues escalating, Yakovlev said.

Gazprom Neft keeps its plans to reach the target output level of 60,000 barrels daily at the Badra field in 18 months, Yakovlev said.

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