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Russia Delays Meeting With Oil Producers On Cuts

Alexander Novak

The meeting between Russia’s largest oil producers and the energy commission, expected to discuss the implementation of the 300,000-bpd production cut on December 19, has been postponed, Reuters reported on Monday, quoting an industry source.

The meeting was expected to be chaired by Russian President Vladimir Putin, and the reason for the postponement is not yet clear.

Rosneft’s chief executive and close Putin ally, Igor Sechin, serves as secretary at that energy commission. Sechin is known for his anti-OPEC position and has claimed that the cartel has lost its influence over global oil after the U.S. shale revolution.

Russia and 10 other non-OPEC producers agreed on Saturday to cut total oil production by 558,000 bpd as part of a wider deal with OPEC, but the details as to how Russia is going to execute such a cut have not yet been hammered out.

Russia has been pledging 300,000 bpd since OPEC-only nations agreed to curtail output by 1.2 million bpd. The Russian energy ministry had first said that it would announce a production-cut schedule for its oil companies after this weekend’s meeting.

Last week, Energy Minister Alexander Novak held a meeting with oil producers, after which Kremlin spokesman Dmitry Peskov said that Russian companies would not receive compensation for the production cuts.

Related: Having Outmaneuvered OPEC, Can Iran Handle Trump?

On Saturday, following the deal between OPEC and non-OPEC producers, Novak said in a statement that as part of the agreement Russia would lower its oil production by 200,000 bpd in the first quarter of 2017. According to Novak, the non-OPEC nations would cut output from October levels.

In order to monitor the compliance with the terms of the deal within Russia, the country would create a monitoring group consisting of representatives of the oil companies, Novak noted.

According to Reuters, Russia’s second-biggest producer Lukoil has said it would be willing to cut output, and Tatneft would be ready to cut its production by 20,000 bpd.

By Tsvetana Paraskova for Oilprice.com

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