Russia’s biggest oil company, state-run Rosneft, plans to up oil production as soon as the current OPEC+ deal ends, a person close to the company told Bloomberg.
The person, who spoke on condition of anonymity, said that Rosneft had prepared for any scenario and would be able to withstand the current plunge in oil prices. Asked how rapidly Rosneft could increase production, the person said analysts who estimate the company could boost output by 300,000 barrels a day within a week or two are well informed.
The comments, the first Russian response to the oil price war launched by Saudi Arabia over the weekend, suggest that Rosneft could start boosting output as soon as April 1.
Rosneft Chief Executive Officer Igor Sechin is a close ally of President Vladimir Putin and has been the most prominent opponent of the country’s cooperation with Saudi Arabia and other countries in the Organization of Petroleum Exporting Countries (OPEC) to curb oil production.
Last week in Vienna, ministers from Russia, Saudi Arabia and other members of the group left a fractious meeting with no deal to continue the cuts beyond April 1. Saudi Arabia heavily discounted its oil over the weekend, triggering a plunge of more than 20% in international crude futures.
Rosneft’s London-listed shares dropped 19.5% on Monday, while markets in Moscow were closed for a public holiday. In a separate statement, Russia’s finance ministry said that the country’s oil-wealth reserves would be sufficient to cover lost revenue “for six to 10 years” at oil prices of $25 to $30 a barrel.
