Wednesday 24 April 2019

Russia won't join in OPEC cuts despite Chavez pleas

Venezuela President Hugo Chavez speaking as Russia Deputy Prime Minister Igor Sechin applauds
during a visit to an exploration drill site in Punto Fijo in the Venezuelan state of Falcon last week
Venezuela President Hugo Chavez speaking as Russia Deputy Prime Minister Igor Sechin applauds during a visit to an exploration drill site in Punto Fijo in the Venezuelan state of Falcon last week

Russia, the world's second-biggest oil producer, will defy calls from Venezuelan President Hugo Chavez to join the Organisation of Petroleum Exporting Countries (OPEC) in cutting output and pursue an "independent" strategy, finance minister Alexei Kudrin said.

His comments came as OPEC said it will cut oil output again if the trend towards lower prices and slowing demand growth are unchanged when the group meets in December, Iran's OPEC governor Mohammad Ali Khatibi said yesterday.

The credit crisis and economic slowdown could shave as much as three million barrels per day (bpd) from global crude demand, Mr Khatibi said.

Prices have fallen by about 54pc since July this year and now stand at about $61 a barrel compared to July's peak of $147 a barrel.

Risks

"The government isn't planning any restrictions of oil production in the near future," Mr Kudrin said in an interview in Sao Paulo yesterday.

"We don't want to impose administrative barriers for restricting production. Oil businesses should estimate their own risks."

Mr Chavez said he had asked Russia to work with OPEC to reverse the slide in oil prices. OPEC, supplier of more than 40pc of the world's oil, announced production cuts during September and October and may announce a further reduction at a December 17 meeting in Algeria, OPEC president Chakib Khelil said.

Russia cut its forecast for the price of Urals, the country's major blend of oil, to $50 a barrel in 2009 on average, from $95 a barrel previously, Mr Kudrin said.

He added that Russian officials are "holding consultations with the OPEC" and at OPEC meetings to learn in learning about new production technologies and financing oil field development.

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