Monday 10 November 2008

Russia pursues independent strategy

Russia, the world’s second-biggest oil producer, will pursue an “independent” strategy on oil production, ignoring Opec’s moves to cut output, according to Finance Minister Alexei Kudrin.

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Guanyu said...

Russia pursues independent strategy

Bloomberg in New York
10 November 2008

Russia, the world’s second-biggest oil producer, will pursue an “independent” strategy on oil production, ignoring Opec’s moves to cut output, according to Finance Minister Alexei Kudrin.

“The government isn’t planning any restrictions of oil production in the near future,” said Mr Kudrin, who also serves as deputy prime minister. “We don’t want to impose administrative barriers for restricting production. Oil businesses should estimate their own risks.”

Venezuelan President Hugo Chavez on October 28 said he had asked Russia to work with the Organisation of Petroleum Exporting Countries to reverse the slide in oil prices, which have fallen more than 50 per cent in the past four months.

The cartel’s president Chakib Khelil said Opec, the supplier of more than 40 per cent of the world’s oil, announced production cuts in September and last month and might say it planned a further reduction at a December 17 meeting in Algeria.

Mr Kudrin said: “Of course we expect a decline of oil prices” next year as economies of the biggest oil consumers, such as the United States and European Union countries, might contract.

Russia cut its forecast for the price of Urals, the country’s major blend of oil, to US$50 a barrel next year on average from US$95 a barrel previously, he said.

Urals crude traded at US$55.71 a barrel on Friday, 61 per cent below its high of US$142.50 in July.

“We are holding consultations with Opec and our representatives are present at the Opec meetings” because Russia was interested in learning about new technologies in oil production and ways of financing the development of oilfields, Mr Kudrin said.

Russia’s biggest oil-producing companies have private shareholders. The country’s oil and gas pipelines are controlled by the state.

“Unlike Opec countries, many of our oilfields are being developed by private companies,” Mr Kudrin said. “It’s too early” to talk about whether Russia would consider becoming an Opec member in the next 10 years.