Russia says its oil firms ready to back curbs with OPEC

Wednesday, Oct 12, 2016,11:19 IST By metrovaartha A A A

Istanbul | Russia said its oil majors were ready to back moves by the government to curb oil production in coordination with OPEC to push up oil prices that have been under pressure for months.

A day after President Vladimir Putin propelled oil prices higher by saying Moscow could join OPEC by freezing or cutting production, Energy Minister Alexander Novak confirmed that Russia was ready to take part in the process of “rebalancing” prices.

But speaking at the World Energy Congress in Istanbul, Novak emphasised that Russian companies, who include state-controlled oil giant Rosneft, were prepared to be included in such moves.

“We have discussed this situation with our companies…

And I repeat again that our companies have expressed readiness to take part in joint actions on the oil market.” “We will continue this work with our companies,” he said, noting that while Russia has some 200 oil companies, 10 prominent players account for 90 percent of production.

Putin’s declarations yesterday, also at the Istanbul forum, gave oil markets a boost with the prospect of tighter coordination between the top non-OPEC oil producer Russia and the cartel.

Novak is expected to hold talks tomorrow in Istanbul with some OPEC members. OPEC had last month in Algiers agreed its first production cut in eight years to bolster prices.

“I think that very soon we can join decisions taken by OPEC,” said Novak, echoing Putin’s comments. “It is important for the producers and consumers.”

He said that OPEC and non-OPEC members could take actions to stabilise the situation on the oil markets “without touching the fundamental market principles”.

“It is a shared task,” he said, praising participants for showing “sense and flexibility”.

He predicted that the volatility on oil markets “will continue to be at a high level but in time it will decrease.”

Novak told reporters after his appearance in a plenary session that it was most sensible for Russia to consider a six month freeze in production that could then be further extended if necessary.

A year long freeze would be “rather a long time”, he said.

The secretary general of OPEC Mohammed Barkindo, described the Algiers agreement as a “turning point” and hailed the greater coordination with non-cartel members like Russia.

“We have restored the broad consensus among all producers,” he said.