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Lukoil CEO says a smooth exit from OPEC + deal possible if oil price is $70 per barrel

Lukoil does not plan to change the investment program in connection with the extension of the OPEC + agreement

MOSCOW, January 12. /TASS/. A smooth exit from the OPEC + oil production cut agreement can be started if the oil price is $70 per barrel, head of Lukoil Vagit Alekperov told reporters.

"I think that if it is $70 per barrel, then, of course, you need to smoothly withdraw from the deal (OPEC + TASS)," Alekperov said. He added that he means stabilization of oil prices at this level.

Earlier on Friday, the price of the futures contract for Brent crude oil deliverable in March 2018 rose to $70.05 per barrel (by 1.2%) at the ICE exchange in London. Last time the price of this blend was more than $70 per barrel on December 4, 2014.

OPEC member-states and the oil producing countries, that are not OPEC members, reached the agreement on reduction of oil production in late 2016.

Lukoil does not plan to change the investment program in connection with the extension of the OPEC + agreement, in 2018 it will be at the level of 2017.

"The program is approved at 550 bln rubles ($9.7 bln) for 2018, including more than 80% allocated for investments in Russia. No, we do not change our investment program based on those short-term solutions to limit production," he said.

Lukoil plans to disclose details of the company's new strategy on March 23 at the Investor Day in London, he went on. "On March 23 in London there will be a meeting with investors, where we will explain our strategy in more detail," he said.

Lukoil plans in 2018 to increase hydrocarbon production without taking into account the project in Iraq, West Qurna-2, to 121.1 mln tonnes of oil equivalent (toe) against 118.3 mln toe in 2017, he added. 

"121.1 mln tonnes of oil equivalent in 2018, 85.9 mln tonnes of oil without talking into account the West Qurna2 project," he said. Taking into account the Iraqi project, the planned production volume reaches 124 mln tonnes of oil equivalent for hydrocarbons, 89.1 mln tonnes for oil.

Lukoil is considering sale of up to 20% in Litasco to the trader’s management, he said.  "A great deal of proposals is in place. The decision has been taken at present to sell up to 20% to the management [of the trader - TASS], improve operating performance of the company and motivate the management," Alekperov said.

Lukoil postponed the decision on sale of its oil trading arm Litasco to 2018 because of some technical matters, Alekperov said earlier.

Litasco is the international trader of Lukoil registered in 2000 in Switzerland. The company has branches in several countries, including the United States, China, Iraq and India.