MOSCOW, March 21. /TASS/. The coronavirus pandemic had a serious impact on the oil market, but positive news from China demonstrate that this problem should not be exaggerated, Rosneft CEO Igor Sechin said on Friday.

"In my opinion, coronavirus is indeed a serious problem, which should be taken into account while balancing the market. But, on the other hand, there is no need to dramatize the situation. As we can see now, China has almost coped with the epidemic. The recovery [of patients] and the decline in newly detected cases have very positive dynamics, that is why it seems that a certain remedy against the coronavirus has been found, which is isolation."

According to HIS Markit, global oil demand in March and April may decline by ten million barrels per day as a result of the novel coronavirus outbreak. The disease that originated in China and spread rapidly all over the world caused a sharp fall in commercial air transport. Besides, transport services and traffic worldwide were also affected by quarantine measures in a number of states, including Russia.

According to Sechin, oil prices are expected to get adjusted within six months and may be back to $60 per barrel by the yearend.

"The market will get corrected and I think quite rapidly. In a span of six months, we will see the changes in a more stable, right direction. By the end of the year, I believe, the price may be back to 60 US dollars in case shale oil is out of the market," he said.

He said that the current oil prices crash is not dramatic but "brings no joy" either.

"I wouldn’t call the current prices a stress scenario. Naturally, such a slump like today’s brings no joy but it gives no feeling of drama either," he said.

The price of futures contracts of Brent crude oil for May 2020 delivery dropped by 5.34% on London's ICE as of 21:29 Moscow time on Friday, to $26.94 per barrel. The price of futures contracts of WTI crude oil was down by 10.7%, to $23.14 per barrel.

Shale oil projects

The current oil prices make shale oil extraction projects inefficient, Sechin said.

"It is already being reported that extraction assets are being withdrawn from shale production. The decline of prices to the current level makes it impossible to attract financing, although incumbent US financial authorities actively support their companies. Regardless of investments that are being suggested, the current level of prices will make it impossible to efficiently produce shale oil," he said.

The price of futures contracts of Brent crude oil for May 2020 delivery dropped by 5.34% on London's ICE on Friday to $26.94 per barrel, according to the trading data as of 9:29 pm Moscow time. Futures contracts of WTI crude oil traded at $23.14 per barrel, down 10.7%.

Fatih Birol, head of the International Energy Agency (IEA), said in early March that shale oil production in the United States may plunge if oil prices decline to $25 per barrel.

Resource base

The resource base of Russian oil major Rosneft is sufficient for maintaining current production levels for 22 years without making additional investments into oil and gas prospecting, company CEO Igor Sechin told reporters.

"Our operational losses will allow us to work in this regime for quite a while. Our resource base enables us to extract oil for 22 years without reducing the output even if no additional investments are made into geological prospecting," he said.

"That is why we feel fairly confident and are convinced that we should follow the market framework and work on the market to demonstrate our efficiency," Sechin continued.

The Rosneft CEO went on to say that the company’s oil production costs were low, at $3.1 per barrel.

"Our operational expenditures are generally low, at $3.1 per barrel. We have the entire set of mechanisms to bring about our plans," he added.

On February 11, Sechin said at a meeting with Russian President Vladimir Putin that Rosneft had maintained its production level flat in annual terms in 2019 and produced 285.5 mln tonnes of hydrocarbons.

Oil market share

Sechin also told reporters that it was vital to preserve the company’s share on the oil market and retain its customers.

"It is important to preserve the market share. A price can be adjusted, but if you leave your customers you will never have a chance to return there," he said.

In his opinion, the United States managed to significantly increase its market share in the years of the OPEC+ agreement on oil production cuts.

"Look at what happened during the three years of our participation in the OPEC+ agreement. US oil production was blooming, and they came to the fore of global oil production," Sechin said, adding that the United States was building new export pipelines and sea terminals, while its oil and gas companies attempted to gain a foothold on the European market.

"Deliveries to India grew tenfold, to Europe - sixfold. Do we need to preserve our share of the market or not? I think we do," the Rosneft CEO said.

OPEC+ deal

The role of the OPEC+ agreement, under which oil exporting countries reduced their oil production, has lost its importance for the market due to numerous factors including US sanctions and the novel coronavirus, Rosneft CEO Igor Sechin said.

"I think that in general, the OPEC+ deal has already lost the importance we had once attached to it. Other factors are now in place, political and sanction-related ones, including the factor of coronavirus, the condition of the consumer market, of economic stagnation," he said during a Rossiya-24 TV channel broadcast.