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Russia is planning to reduce its oil production by 50,000 bpd to 60,000 bpd in January as part of the new OPEC+ deal, and will not be cutting its 228,000-bpd share outright at the start of the agreement, Russia’s Energy Minister Alexander Novak said on Tuesday.
Russia has already drafted a timetable for how much oil production it would reduce each month until it reaches its share of the OPEC/non-OPEC production cut, Novak said, reaffirming Moscow’s position that its reduction would be gradual, just like in the previous agreement between OPEC and the Russia-led non-OPEC partners.
While Russia will be making the lion’s share of the non-OPEC 400,000-bpd cut, it would take months to reach the 228,000-bpd production reduction, Novak said on Friday, after OPEC and its allies sealed the deal.
The agreement calls for 2.5 percent cuts from the October production levels, which for Russia was a post-Soviet record high of 11.4 million bpd.
“The oil production will be reduced, just as two years ago, as quickly as possible in terms of technology. I think it will take several months,” Novak said at the after-meeting press conference.
Speaking to reporters in Moscow today, Novak said that the Russian monthly production-cut schedule entails a “gradual reduction in line with agreements.”
Russia plans to cut at least 50,000 bpd-60,000 bpd in January, Novak said.
By the end of this year, the energy minister will meet with representatives of Russia’s oil companies to discuss the implementation of the cuts, he noted.
The key goal of the new deal is to reduce the inventories, just like last time, Novak said.
Inventories have been rising for seven consecutive weeks and there is an oversupply on the market, the minister said, adding that OPEC and allies would attempt to keep inventories from rising above the five-year average.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.