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Rosneft does not rule out production reduction due to decreasing oil prices — CEO Sechin

February 10, 2015, 15:51 UTC+3 LONDON

If oil prices decline, the efficiency of the production will suffer, so Rosneft may reduce some of the volumes of hard deposits, the company's head Igor Sechin says

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© ITAR-TASS/Alexandra Mudrats

LONDON, February 10. / TASS /. Russia's biggest oil producer Rosneft is not ruling out the possibility of a production reduction, if oil prices decline, Rosneft head Igor Sechin told the reporters at an IP Week (International Petroleum Week) in London on Tuesday.

"Everything will depend on the price. If the price goes up, the production will also be maintained at a normal level. If the prices decline, then, of course, the efficiency of the production will suffer, so we may reduce some of the volumes of hard deposits," Sechin said.

"The main thing is that the price is appropriate. It is important to provide price return on investments. The price of $60-$80 is an appropriate price," Sechin added.

Russia is ready to join the Organization of the Petroleum Exporting Countries (OPEC) as an observer, Rosneft's CEO said.

"We’re ready to cooperate, and we’re also ready to join [OPEC — TASS] as an observer," Sechin said. "However, they want us to join OPEC as a member, though we can’t do this due to extraction peculiarities of Russia’s oil industry," he added.

"We cannot operate the way OPEC members operate, Russia’s oil industry is partly privatized, there are some foreign shareholders," Rosneft CEO said.

Sechin added that on the other hand, "the conditions of extraction differ from those in Africa and the Middle East", besides, Russian producers "cannot regulate an increase or a decrease of output that quickly", he said.

"Currently, we do not see OPEC as a single structure, there’s a group of states that pursue their own policy within OPEC and force all other members to stick to it, and not all OPEC members support the implementation of decisions made by the organization," Sechin said, adding though that "we can use our opportunities more efficiently for the long-term cooperation."

The investment program of Rosneft in 2015 will remain at the level of last year, CEO Igor Sechin said.

"It will remain the same as in 2014," Sechin said.

Rosneft finds the price of $50 per barrel to be acceptable, as part of its investment program.

"In the interests of our business plan in 2015, we have taken the price of oil at $50 per barrel and that is the price that we are satisfied with for the implementation of our investment programs. Its excess will be directed to projects that we consider necessary," said Sechin.

However, he called $60-$80 per barrel an appropriate price.

Regarding the plans to repay the loan in the amount of $7 billion, Sechin assured that under the sanctions and certain other refinancing restrictions of the debt, the company is dealing with this problem and plans on transferring the next tranche on February 13.

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