Rosneft has begun strategic planning for post-OPEC cut oil markets, according to the state-owned oil giant’s CEO Igor Sechin.
Russia joined in on the Organization of Petroleum Exporting Countries’ (OPEC) deal limit output in November, with Moscow pledging a 300,000 barrel per day reduction. The country’s compliance to the deal - which is set to expire at the end of June unless all participants agree to extend the agreement later this month – rests on Rosneft’s productivity.
"We will plan our work till the year-end in the way that while complying with the agreements, paying a special attention to mature fields not to lose oil resources and do preparations needed for new field launches, so in case the deal is stopped be ready for competitive work on the markets and not to lose our market share," Sechin said.
Rosneft has been cutting output at its newest fields to ensure compliance to the OPEC deal.
Earlier this week, de facto OPEC leader Saudi Arabia agreed with NOPEC Russia that the cuts ought to be extended until the end of March 2018, three months longer than the markets expected. The announcement caused prices to spike upwards.
"I would not think beyond March of the next year," Sechin said when asked if the market would be balanced by then and if a further extension of the global deal may be needed. "We should see how shale oil production (in the United States) will perform."
American shale producers have been ramping up output in recent months because barrel prices in the $50 range allow profitable operations for the low-cost rigs. High U.S. output, as well as rising production in Libya and Nigeria, have jeopardized the anti-glut effects of the deal since its implementation earlier this year.
By Zainab Calcuttawala for Oilprice.com
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Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on…