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Participants of OPEC+ agreement see no need to revise deal’s parameters - Novak

Russia’s Energy Minister also stressed the importance of reaching the 100% compliance rate
Russia’s Energy Minister Alexander Novak Anton Novoderezhkin/TASS
Russia’s Energy Minister Alexander Novak
© Anton Novoderezhkin/TASS

BAKU, March 17. /TASS/. The participating countries of the OPEC+ agreement see no need to revise the parameters of the deal on crude production cut, Russia’s Energy Minister Alexander Novak told reporters on Sunday.

"Currently we see no such need. At least, that was not discussed at today’s meetings. It is important for us now to reach the 100% compliance rate," he said when asked a respective question.

Countries participating in the OPEC+ agreement will discuss possible further decisions for the second half of the year regarding the crude production cut deal in May-June, Novak added.

"Our agreement expires at the end of the first half of the year and, of course, we will be closely watching, monitoring the situation on the market. We realize that the second or the third quarter will see a seasonal hike in demand, whereas there is major uncertainty on the market, of course. That is why we have agreed that we have to continue monitoring the situation and discuss potential further decisions regarding the second half of the year in May-June," he said.

Earlier Novak said that he considers it reasonable to start the talks on the future of the OPEC+ deal in May. The matter was discussed during his meeting with Azerbaijani Energy Minister Parviz Shahbazov on Sunday, Azerbaijan’s Energy Ministry reported.

The OPEC+ agreement made at the end of 2018 has allowed to reduce the volatility of oil prices and pass the winter period favorably, Novak said. "I would like to note that the decisions made last December were right and positively affect the current situation on the market, the demand and supply balance. Thanks to joint efforts, we are passing the winter period more favorably," he said.

Readiness of charter on cooperation

The charter on long-term cooperation between OPEC and non-OPEC countries is at a high level of readiness, Novak noted.

"We discussed during today’s bilateral meetings the issues related to preparing the document, the so-called charter on cooperation between OPEC and non-OPEC countries, which is at a high level of readiness now and we assume could be finally agreed and discussed by the ministerial meeting," he said.

The charter is a new framework document fixing the format of cooperation between OPEC and non-OPEC countries, including Russia, which started at the turn of 2016. The document was planned earlier to be signed at the OPEC+ ministerial meeting in December 2018 but further revisions were required.

In December 2018, OPEC+ countries decided to cut production by 1.2 mln barrels per day from the level of October 2018. It is planned that OPEC nations will reduce output by 800,000 barrels per day, while the remaining countries - by 400,000 barrels. In particular, Russia will cut production by 228,000 barrels per day. The deal covers the first half of 2019 and may be revised in April.

Earlier Novak said that Russia would gradually reach the announced volumes of crude output reduction. He noted that it would be possible to do so already by the end of March.