Russian oil giants prepare for a production surge

Russian oil giants prepare for a production surge

Russian oil firms plan to raise their oil production from April and they are comfortable with the current oil prices and even lower, oil executives said after meeting this week with Energy Minister Alexander Novak – a meeting which didn’t discuss the possibility that Russia may return to the OPEC+ production cut deal as earlier reports suggested, OilPrice.com reports.

Top executives from the major Russian companies, including Rosneft, Lukoil, Gazprom Neft, Tatneft, and Surgutneftegas, met with the minister on Thursday to discuss the companies’ plans and the market situation after the collapse of the OPEC+ deal last week.  

Alexander Dyukov, chief executive at Gazprom’s oil arm, Gazprom Neft, told reporters that returning to the OPEC+ deal was not discussed at the meeting.

The coronavirus outbreak and concerns about recession would have sent oil prices to $35 a barrel anyway, even if OPEC and its Russia-led allies had reached a deal last week, Dyukov said.  

Gazprom Neft is disappointed with the OPEC+ break-up, Dyukov said, but noted that OPEC is to blame for the ‘no deal’ outcome of the talks.

Gazprom Neft, Russia’s third-largest producer, could increase its production by between 40,000 bpd and 50,000 bpd in April, Dyukov said, as carried by TASS. 

Gazprom Neft can work with $35 oil, the manager said, while Tatneft’s CEO Nail Maganov boasted that even $8 oil is not critical for the company, Russia’s Prime news agency reports.

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