MOSCOW--Russia is conducting "unprecedentedly active"
consultations with the Organization of the Petroleum Exporting
Countries but isn't discussing oil production cuts to support
prices, Russian officials said on Wednesday.
The consultations come after several months of low oil prices
that are putting pressure on Russia's budget and currency, but
Russian officials poured cold water on any suggestion of
coordinated production cuts.
"The Energy Ministry is continuing to conduct active
consultations and work with the European Union, countries of the
Asia-Pacific region, the Middle East, including within the
framework of OPEC, as well as with the countries of Latin America,"
Deputy Prime Minister Arkady Dvorkovich said on Wednesday, the
official RIA-Novosti news agency reported. "These consultations are
unprecedentedly active and this work should be continued."
He didn't give any more details, but a spokeswoman for the
Energy Ministry said that consultations with OPEC involve issues on
the oil market and sharing countries' views, and that there was no
talk of Russia cutting its oil output.
Last December, OPEC sent prices tumbling when it decided against
its traditional role of rolling back production to boost prices,
over the objections of some of the cartel's members. Instead the
cartel has fought a pitched battle for market share, pumping well
above its agreed upon ceiling.
Saudi Arabian and OPEC officials have said recently that they
would consider cutting production in concert with big non-OPEC
producers such as Russia, the world's largest producer of crude
oil, and there have been renewed calls for cooperation in
particular from Russia's ally Venezuela, according to an OPEC
delegate.
But Russian officials have long argued that the country's oil
infrastructure is ill-suited to adjusting output to influence
prices and have failed to heed to previous pledges to cut
production.
During a previous oil-price crash in September 2008, Russian
officials promised a Russian production cut to Saudi Arabia and
OPEC, according to an OPEC delegate. But Russia then increased
production instead.
If Russia was to promise a production cut this time, "OPEC will
want it in writing," the OPEC delegate said.
In November, after oil prices plunged, newspaper reports ahead
of an OPEC meeting suggested that Russia could cut production in
coordination with OPEC to support prices, a reminder of pledges in
earlier years by Moscow to reduce output that never amounted to
anything.
But Russian officials later said that the country wouldn't cut
output. "We are not Saudi Arabia, which has the ability to reduce
production quickly, ramp up quickly," said Russian Energy Minister
Alexander Novak at the time.
Mr. Novak said that Russia would keep output steady in the next
few years. "That's our contribution to stabilize the situation on
global oil markets," he said.
Russia's economy ministry forecasts that its oil output will be
unchanged at 525 million tons a year in 2015 and in 2016. In 2017,
Russia's output is set to decline to 521 million tons, the ministry
says.
In an interview with state television broadcast on Tuesday, Mr.
Novak described Russia's cooperation with OPEC in the same terms as
in the past and seemed cool to Saudi suggestions that it would cut
output to boost prices only if non-OPEC producers such as Russia
did too. Mr. Novak said restricting production or exports in a
coordinated way to raise prices would do so "artificially."
Russia supports what he described as the alternate approach,
"which in our view is already rather effectively being implemented
today," relying on market forces to squeeze high-cost
projects--such as U.S. shale oil--out of the market and thus limit
supply growth. "There's an inertial element in these processes that
takes from six to nine months, but we already see that the market
has reacted," he said, with prices up from January levels.
"A fundamental restoration of the balance between demand and
supply has already taken place and it will continue to," he
said.
"As for cooperation with the OPEC countries, we are conducting
consultations, we're exchanging information, we're monitoring
markets and this is a normal process of exchanging information," he
said.
"But our position is that it would be ideal if today the surplus
of oil that's on the market were absorbed either by an increase in
economic growth rates because economies are being stimulated by
lower prices for oil and gas or by the lack of increase of the
supply [of oil] at least until demand and supply are balanced."
He said that he continues to expect crude prices to be about $60
a barrel at the end of this year, having averaged about $55 for the
full year.
Saudi Arabia's oil minister Ali al-Naimi on Tuesday discussed
developing oil cooperation with Russia's Ambassador in Riyadh Oleg
Ozerov, according to the official Saudi Press Agency.
Write to Gregory L. White at greg.white@wsj.com and BenoƮt
Faucon at benoit.faucon@wsj.com
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