Russia will make no apologies to OPEC for boosting oil production to record monthly highs and can invest in new fields while crude trades at current levels, about $70 per barrel, Energy Minister Sergei Shmatko said.
Shmatko told reporters that the world’s No. 2 oil exporter would apply zero export duties for east Siberian oil fields from the end of September, although it would step in to regulate the oil sector should world prices plunge again.
“We never had any obligations [to OPEC]. When we were communicating, we never promised anything,” Shmatko said Thursday, after members of the Organization of the Petroleum Exporting Countries decided to retain output cuts. “To say that we do not abide by the rules is not correct.”
OPEC agreed Thursday to keep oil output steady after pumping a record 4.2 million fewer barrels per day last year. Speaking after the meeting in Vienna, OPEC Secretary-General Abdullah al-Badri said he was not encouraged by Russia’s lack of tangible cooperation.
Russia’s oil output hit a record monthly high of 9.97 million bpd in August as top producer Rosneft launched its huge Vankor field in the Arctic.
As crude prices have doubled from January’s lows — aided by OPEC cuts — Russia’s oil-heavy economy has recouped some of the budget revenues lost last year and shows early signs of economic recovery.
“One can always say that, at a higher price, some projects will be more profitable, but today the price of oil does not set any limits for the oil industry’s development,” Shmatko said.
Russia and OPEC rekindled their courtship last year, but the relationship has gone cold. Non-OPEC countries were not invited to attend this week’s meeting as observers.
“We do not want to be sitting and guessing whether we will be invited to the next meeting,” Shmatko said. “Good for them to issue comments when our representative is not even there.”
Worried about stagnating production as west Siberian oil fields run dry, the government has offered tax breaks worth billions of dollars to help companies develop remote fields.
Shmatko said the government would implement a long-awaited zero duty on exports from 13 fields in east Siberia by the end of September. No time limit for the duty is set.
He said, however, the country would regulate the sector if oil prices plunge again. Unlike OPEC, Russia cannot cut output at Siberian fields quickly for technical reasons, and instead regulates the industry largely through taxation.
He said relations with OPEC could play a role in talks to formalize an 11-member international gas body that some have likened to the oil group.
Russia, the world’s No. 1 gas producer, will present its own candidate to chair the Gas Exporting Countries Forum ahead of its December meeting in the Qatari capital, Doha, he said.
Shmatko will also visit Bulgaria this month to assess the new government’s review of plans for a nuclear power plant and participation in Russia-backed pipelines.
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