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Lukoil welcomes extension of crude production cut agreement

March 16, 2017, 13:46 UTC+3
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MOSCOW, March 16. /TASS/. Russia’s oil major Lukoil considers it reasonable to extend the agreement between OPEC member-states and non-OPEC countries on crude oil production cut, the company’s President Vagit Alekperov said Thursday.

"I think it is [reasonable to extend the agreement - TASS]. The result is obvious. I hope the sides will meet to find a solution," he said, adding that the issue may be clarified in May-June.

Lukoil expects the oil price to stay at the level of $55 per barrel:

"Lukoil is pretty comfortable, we follow all investment programs. We keep the budget based on $40 per barrel. We expect the oil price to stay at the level of $55," he said, adding that the company is "optimistic as the efforts that Russia’s Energy Ministry assumes jointly with OPEC countries are fruitful."

OPEC decided at its November 2016 meeting in Vienna to limit production to 32.5 mln barrels per day in the first half of 2017, down 1.2 mln barrels per day from October 2016 production levels, with the possibility of extending this limit for the remainder of the year. In a subsequent meeting on December 10, eleven non-OPEC countries pledged to cut nearly 0.6 mln barrels per day, among them Azerbaijan, Bahrein, Brunei, Equatorial Guinea, Kazakhstan, Malaysia, Mexico, Oman, Russia, the Republic of Sudan and South Sudan. Thus, the total crude oil production cut will amount to 1.7-1.8 mln barrels per day in the first half of this year. Russia’s Energy Minister Alexander Novak said earlier that the country had reduced crude production within its commitments by 156,000 barrels per day as of early March.

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