Russia’s Oil Producers Gearing Up for Output Boost: Report

As Russia and Saudi Arabia plan to propose a crude production increase of 1.5 million barrels per day in order to stabilize output and bring the market to balance, Russian oil companies support the trend and are ready to contribute to the boost, Izvestya reports.

“There are various outlooks on oil demand. We assume that it will be going up, and we are eager to reach growth rates outpacing this rise,” the Chief Executive Officer of Russian oil producer Gazprom Neft Alexander Dyukov told the paper.

He added that the company might raise production by 1-1.5% if the demand adds half a percent.

CEO of another Russian oil company, RussNeft, Evgeny Tolochek, said that the growing demand for oil after 2020 is possible in the short term, which is primarily related to the fact that alternative fuel cannot fully satisfy the additional demand for energy resources. He also expects local oil producers to join the trend, boosting reserves and thus, crude production.

RussNeft’s strategy stipulates that output will be raised from the current 7 million to 9 million tons by 2020. However, there are companies with more modest production plans for the next 5-10 years, including Lukoil and Surgutneftegaz, the report says.

On June 22-23, OPEC and 11 independent oil-exporting countries, including Russia that entered into the so-called OPEC+ agreement to reduce oil production at the end of 2016, will meet in Vienna to discuss options for further implementation of the deal, which is aimed at reducing global oil reserves to five-year average levels.