Russian Energy Minister: Can’t Cut Oil Production Quickly

Russia’s energy minister Alexander Novak said Thursday that due to cold winter weather and geological conditions, Russia could not cut production too quickly, according to oil and gas news reports. Novak reiterated Moscow’s commitment to stick to the new OPEC + agreement and gradually reduce production.

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Novak pointed out that Russia will strive to cut oil production faster.

A few days ago, Saudi Arabia’s energy minister, Khalid al-Falih, said that Russia’s production cuts were “slower than I hoped”.

“Russia has started, slower than I hoped, but they have started, and I believe they will catch up and make a positive contribution to rebalancing the market as they did in 2017,” al-Falih told CNBC on Sunday.

Under the new OPEC+agreement, Russia will cut its crude oil production by 228,000 barrels a day within six months from January 1, 2019, and may assess it in April.

After agreeing in December last year, Novak said that Russian oil companies would cut production in the first quarter of 2019.

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Novak has said that as part of the OPEC+New Agreement, Russia plans to cut oil production by 50,000 barrels to 60,000 barrels a day in January, and will not directly reduce production by 228,000 barrels at the beginning of the agreement. Novak said Russia has drafted a timetable to determine how much oil production Russia will cut monthly before reaching the OPEC/non-OPEC reduction ratio. Novak reiterated Moscow’s position that Russia’s output cuts would be gradual, just as the previous agreements reached between OPEC and Russia’s non-OPEC members.

Novak said on Friday that Russia has cut its output by about 30,000 barrels a day compared with the October cut benchmark and still intends to achieve 50,000 barrels a day by the end of this month.

Today, Novak told the Russian news agency Agence Novosti that he would meet with al-Falih at next week’s World Economic Forum in Davos to discuss joint projects, cooperation and the implementation of the OPEC+agreement.

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