• 4 minutes Pompeo: Aramco Attacks Are An "Act Of War" By Iran
  • 7 minutes Who Really Benefits From The "Iran Attacked Saudi Arabia" Narrative?
  • 11 minutes Trump Will Win In 2020
  • 15 minutes Experts review Saudi damage photos. Say Said is need to do a lot of explaining.
  • 2 hours Iran Vows Major War Even If US Conducts "Limited Strikes"
  • 5 hours Shale profitability
  • 5 hours When Trying To Be Objective About Ethanol, Don't Include Big Oil Lies To Balance The Argument
  • 7 hours Ethanol, the Perfect Home Remedy for A Saudi Oil Fever
  • 12 hours A little something for all you Offshore swabbies
  • 15 hours New designs will reduce transport fuels consumption
  • 27 mins Memorize date 05/15/2018 cause Huawei ban is the most important single event in world history after 9/11/2001.
  • 21 mins Europe: The Cracks Are Beginning To Show
  • 12 hours Let's shut down dissent like The Conversation in Australia
  • 6 hours One of the fire satellite pictures showed what look like the fire hit outside the main oil complex. Like it hit storage or pipeline facility. Not big deal.
  • 15 mins LA Times: Vote Trump out in 2020 to Prevent Climate Apocalypse
  • 16 hours Democrats and Gun Views
  • 3 hours Yawn... Parliament Poised to Force Brexit Delay Until Jan. 31
  • 13 hours US and China are already in a full economic war and this battle for global hegemony is a little bit frightening
All Eyes Are Off Venezuela

All Eyes Are Off Venezuela

The current situation in the…

Gazprom Speaks Out Against OPEC Production Cut Extension

Gazprom

While OPEC is said to be mostly leaning toward a 9-month extension of the production cuts, Russia’s Energy Minister Alexander Novak and major Russian oil companies discussed last week a six-month extension after March 2018, and all but one company said they were ready to extend, Russia’s TASS news agency reported on Tuesday, quoting two sources who had attended the meeting.

A possible six-month extension proposal from Russia is shorter than the market is largely expecting—nine months through the end of 2018. It could also put Russia on a collision course with Saudi Arabia, its key partner in the OPEC/non-OPEC deal to curb production to erase the glut and prop up oil prices.

In early October, Russia’s President Vladimir Putin said that Russia was open to extending the production cut deal, but echoed other officials’ comments at that time that it was too early to decide.

“If we speak about a possible extension, then of course, it should be at least until the end of 2018,” Bloomberg quoted Putin as saying at an energy forum in Russia.

But a month and a half later, with Brent trading above $60 for more than three weeks, there is growing talk and speculation that Russia might walk away from the deal, or try to stall either the taking and/or the announcement of the decision, because it doesn’t see such announcement as urgent as possibly many of OPEC’s producers.

“Extending the deal was discussed. Everyone except Gazprom Neft agreed, because the company will launch new projects in 2018,” one of TASS sources said, adding that Rosneft—the biggest Russian oil producer led by Putin’s close ally Igor Sechin—did not voice disagreement over extending the cuts.

Related: Is The LNG Glut Real?

Last month, a senior Gazprom Neft executive said that the company was ‘holding its nose’ to the production cut deal because it had made the company cut its production growth targets.

Novak is due to meet Russian oil producers again today, and said yesterday that Russia would decide later this month what its position for the Vienna meeting on November 30 would be.

Russian oil firms are said to be balking at a further extension, arguing that their production restrictions are only benefiting others while Russian companies have to cut back from new projects in which they have heavily invested. 

Even though there are consultations with oil companies, Russia’s final decision “will still be made by senior officials” and “it might be completely different”, one of TASS’ sources said.  

Almost all countries part of the deal have expressed readiness to extend the pact, so the only remaining question is when the decision should be taken—at the meeting next week, or at an extraordinary meeting early next year, a TASS source in OPEC said. 

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play