By the end of the year, the oil market might re-balance itself, as excess stocks will continue to be reduced, with the price of Brent crude potentially reaching $40, Izvestia reported.
Russia’s oil major Rosneft may сut back its investment program by 200 bln rubles (about $2.7 mln) as a result of previous decisions to shrink production, Rosneft CEO Igor Sechin said regarding the outcome of a meeting with Russian President Vladimir Putin on Tuesday. According to Sechin, this is a necessary move to maintain the oil producer’s financial and economic stability, TASS writes.
Putin and Sechin discussed maintaining an optimal volume of investment during 2020, with the head of Rosneft admitting that the company will be forced to cut back some of its capital expenditure due to the current situation on the global oil market and the decisions made to decrease production. The Rosneft chief executive stressed that a milder policy of bank lending might improve the position of the company, its contractors and suppliers.
Sechin also asked Putin to postpone Rosneft’s tax payments in the field of geological exploration. He also stressed that transport tariffs and their adjustment to current oil prices remain a key issue. The Russian leader promised to discuss those issues in detail.
Russian Senator Vladimir Dzhabarov told Izvestia that the oil industry needs support during such a difficult time, taking into account the situation in the world, the new OPEC+ deal and the drop in oil prices. He stressed that Putin’s focus on the oil industry is crucial in these conditions.