Russia’s energy minister said on Wednesday OPEC members were preparing a “significant cut” in oil production, and that Russian output was likely to decline in 2008 despite government attempts to stimulate production.
Sergei Shmatko also said Russia would give political backing to LUKoil’s bid for a stake in Spain’s Repsol should the country’s largest private oil company ask for support.
Shmatko, speaking to reporters after meeting OPEC representatives in Moscow, said Russia expected a significant reduction in output from member countries. The next OPEC meeting is scheduled to take place in Algeria on Dec. 17. Russia, the largest oil producer outside the group, would make its own proposal at the same meeting, which it will attend as an observer, Shmatko said.
“We have prepared our concrete proposals and will announce them at the forum,” the minister told Reuters separately. “These are linked to measures to protect our national interests and to provide, in our view, fairer and more stable rules on the oil market.”
Russian oil production would probably decline this year for the first time in a decade, Shmatko said, although his comments were not linked to any specific OPEC-related output cut plans. “Company results over the last two to three months could lead to a decline of several percent, though not a large decline,” the minister told reporters.
Commenting on LUKoil’s reported plan to spend €10.7 billion ($13.84 billion) acquiring a stake in Repsol, he said Russia would support such a bid politically. “We relate very positively to such measures. It would be interesting to us from the point of view of LUKoil entering the European market,” he said. “Without doubt, if LUKoil requires it, we will provide the relevant political support.” (Reuters)