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Rosneft CEO warns the era of low oil prices likely to last

June 02, 2017, 14:39 UTC+3 ST.PETERSBURG
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ST.PETERSBURG, June 2. / TASS / The time of low oil prices is here to stay, but Rosneft is more influenced by the fiscal structure than price fluctuations, said Rosneft CEO Igor Sechin at the summit of energy company heads at the 2017 St. Petersburg International Economic Forum on Friday.

"We can say that the period of low oil prices will last for a long time. Analysts are already considering scenarios with price parameters of $50-40 or even $30 per barrel," said Sechin.

While answering questions, Sechin noted that the fiscal structure has a greater influence on Rosneft than the volatility of oil prices. He assured that the company guarantees stable supplies of oil both to the domestic and foreign markets.

Sechin said that the $50 per barrel oil price is helpful to Russia's budget, but this state of the market is not sustainable. "The OPEC agreement has improved the market situation, and the resulting price level of $50 per barrel and above is useful for the Russian budget and Russian companies, but this market condition is not sustainable," he said.

According to Sechin, the long-term oil market balancing at $40 per barrel will bring half the output to an unprofitable level and create problems for shale producers. "A sufficiently long market balance at $ 40 per barrel will bring half the output to an unprofitable level - first of all, on Brazil’s deep-sea projects, on Canadian oil sands, it will create problems for shale producers, with the exception of high-efficiency sections of the Perm basin. Russia, Saudi Arabia, a number of effective US projects, Iran and projects in some other countries will remain competitive, but this will not help the consumption market," Sechin said.

He said that the uncertainty on the market also leads to the aggravation of the struggle for consumption markets. "We must agree that if the industry needs sustained long-term stability, all major producers should participate in the regulation of production, therefore, in the current state, we cannot talk about stabilization or a sustained reversal of negative market trends," Sechin said.

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