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Lukoil expects growth of oil production in Russia in 2017 — vice-president

October 11, 16:35 UTC+3
Russia’s oil major Lukoil is ready to join the initiative on crude production freeze if there is a government decree
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© Valeriy Matytsin/TASS

ISTANBUL, October 11. /TASS/. Russia’s oil major Lukoil expects growth in oil production in Russia without decision on freezing of oil production, the company’s Vice President Leonid Fedun told journalists on Tuesday.

"As for the forecast for 2017, we see growth as well as in 2018. I am talking about Russia, because it is difficult to predict the rest," he said.

Crude production freeze

According to Fedun, Lukoil is ready to join the initiative on crude production freeze if there is a government decree.

"I would like to speak for Lukoil, if there is a government decree we will join (the crude production freeze - TASS)," he said when asked about the crude production freeze, adding that "all will join."

"I think it should be frozen by one year at the least," Fedun said.

Contraction of production by 1.5-2% is feasible, Fedun said. "As far as I understand, production as of the beginning of January is the case in point. 5% [cut] is too much; there will be shortage on the market. We do not need the price above $60 per barrel," he added.

Russia has a technical opportunity to slash production, Fedun said. "Yes, this is technically possible. It’s very simple, there are fields with benefits, and these will increase production. Brownfields, without benefits, will be subject to production cut," he added.

Bashneft privatization

Lukoil has rejected participation in Bashneft privatization due to high price, Fedun said.

"Of course, it’s expensive. Initially we applied. As a matter of fact, we are aware of the price, aware of a fair valuation. It is expensive for our company. For Rosneft, whose profits will be taken by the state, it’s all the same what the price is," he said, adding that "the announced price of 5 bln (dollars) does not meet our economy."

The company has no plans to withdraw from the joint venture with Bashneft on Trebs and Titov deposits after the deal with Rosneft.

"How can we drop it - there is a shareholders' agreement, it is enshrined in law. I hope that Rosneft will comply with the law," he said, answering the question about Lukoil plant regarding joint venture with Bashneft.

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