Russian oil companies are comfortable with current and even lower oil prices and are preparing to raise production from April, oil executives said after meeting this week with Energy Minister Alexander Novak, OilPrice.com writes.
Top managers from major firms including Rosneft, Lukoil, Gazprom Neft, Tatneft, and Surgutneftegas, met with the minister on Thursday to discuss the companies’ plans and the market situation after the collapse of the OPEC+ deal last week.
Alexander Dyukov, chief executive at Gazprom’s oil arm, Gazprom Neft, told reporters that returning to the OPEC+ deal was not discussed at the meeting.
The coronavirus outbreak and concerns about recession would have sent oil prices to $35 a barrel anyway, even if OPEC and its Russia-led allies had reached a deal last week, Dyukov said.
Gazprom Neft is disappointed with the OPEC+ break-up, Dyukov said but noted that OPEC is to blame for the ‘no deal’ outcome of the talks.
Gazprom Neft, Russia’s third-largest producer, could increase its production by between 40,000 bpd and 50,000 bpd in April, Dyukov said, according to RIA Novosti.
Gazprom Neft can work with $35 oil, the manager said, while Tatneft’s CEO Nail Maganov boasted that even $8 oil is not critical for the company, Russia’s Prime news agency reports.
Commenting on reports that Saudi Arabia is now preparing to flood the markets with its cheaper oil, including Russia’s key market Europe, Dyukov said that Gazprom Neft isn’t concerned that its oil would be pushed out because basically all its volumes have been contracted despite the current market conditions.
Earlier this week, Novak said that Russia has the potential to ramp up its oil production by 500,000 bpd. On Friday, he told reporters that Russia would be able to restore by the end of April all the production cuts under the deal with OPEC, which would boost production by 200,000 bpd from current levels.
