Will Novak to decide fate of OPEC deal?

Will Novak to decide fate of OPEC deal?

Russia’s oil industry will continue to monitor implementation of a global OPEC+ deal on cutting oil production, and Energy Minister Alexander Novak will take a final decision independently, Lukoil CEO Vagit Alekperov said.

Alekperov was speaking after a meeting in the energy ministry between oil company executives and ministry officials to talk about the production cut deal and other topics, Reuters reported.

Novatek First Deputy CEO Alexander Fridman said, in turn, noted that representatives of oil companies weren't discussing other issues except for oil refinery and the OPEC deal, adding that oil prices were also discussed.

The chief executive of Russian oil company Surgutneftegaz, Vladimir Bogdanov, said he took a positive view on maintaining a global deal on cutting crude production.

Sberbank CIB analyst Valery Nesterov, speaking with a correspondent of Vestnik Kavkaza, said that the companies delegated the Ministry of Energy to decide on the deal, because it is guided by the interests of companies in it actions. "The ministry's policy in agreement with the companies to cut oil production by 300,000 barrels per day at this stage has justified itself - it has given additional revenues to both companies and the budget in connection with higher selling prices. Now not so much depends on the behavior of companies, because the state of affairs is more influenced by fluctuations in the world oil market and the dollar," he pointed out.

"It is expected that by the summer the amount of oil stocks will increase again, and the situation will be complicated by record volumes of oil output in the US - over 10 million barrels per day. Thus, the deal with OPEC to reduce oil production is still only a temporary solution to the problem. We believe that in the case of Russian oil companies, they have good growth potential in the medium term, although we do not expect an increase in production in 2018. That is, we can expect an increase in Russia's production somewhere around 2021, but taking into account the price of about $60 per barrel," Valery Nesterov warned.

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