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Russian oil companies agree to extend deal on oil production cut — energy minister

May 15, 8:36 UTC+3 BEIJING

Russia and Saudi Arabia are going to hold consultations with the parties to the deal before May 24

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BEIJING, May 15. /TASS/. All Russian oil companies share the position of the Russian Ministry of Energy to extend the agreement on reducing oil production for another 9 months, Energy Minister Alexander Novak told reporters.

"Before discussing extending the agreement with my colleague from Saudi Arabia, we discussed our position with our companies. This is our common consolidated position," the Minister said.

Russia participates in the oil output reduction deal, pledging to reduce production by 300,000 barrels per day starting from January 1, 2017, to the level of October 2016, or by 2.7%. Russia has fulfilled its quota in early May.

Earlier, Minister of Energy, Industry and Mineral Resources of Saudi Arabia Khalid Al-Falih and Russian Energy Minister Alexander Novak in a joint statement said that the two countries are going to recommend at the meeting of the agreement participants on May 25 to extend it for another 9 months, until the end of March 2018, retaining the previous quota of 1.8 mln barrels per day.

OPEC countries and countries outside the cartel participating in the deal on reducing oil production reached a full consensus on extending the deal, Khalid Al-Falih told reporters.

"I think the decisions will be positive in Vienna. We bring together a complete consensus of the group," the minister said. "Our nations agreed to extend the deal up to the end of March 2018 with the same volume of allocations, which was included in the agreement from December 10," he said.

Russia and Saudi Arabia are going to hold consultations with the parties to the deal before May 24, according to the joint statement of the two countries.

Thus, the Ministers agreed to hold consultations with "the countries-participants in the agreements and other producers before May 24" for the purpose of reaching a full consensus on the nine-month extension of the declaration on cooperation.

According to Al-Falih, Saudi Arabia supports extending the agreement between OPEC and non-OPEC countries to reduce oil production until the end of March 2018.

"We have come to the conclusion that the agreement needs to be extended. We will now reach the desired inventory level in the end of June," he said, adding that it would be better to postpone ending the deal to the end of the Q1 of 2018.

The Minister said that OPEC countries and countries outside the cartel participating in the deal on reducing oil production reached a full consensus on extending the deal.

Novak said more countries will participate in the meeting in Vienna on May 25 than in the current agreement to discuss the terms for extending  the agreement.

"More countries will be invited, the doors are open," the Minister said, adding that all known countries-exporters are invited.

The Minister also noted that the current consultations show that almost all participants in the current agreement are committed to its extension. "I see no reason for some countries to get out," Novak said.

He noted that the goals of the current agreement have not yet been achieved, and it is necessary to continue cooperation.

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