RUSSIA TO KEEP INDEPENDENT POLICIES FROM OPEC
Budapest Business Journal
October 22nd, 2008
Hungary
Russia will stick to constructive dialogue with OPEC but keep its
policies independent, its energy minister said on Tuesday after OPEC
called on producers like Russia to join production cuts.
Russian Energy Minister Sergei Shmatko was speaking just before OPEC
Secretary General Abdullah al-Badri landed in Moscow for talks with
top Russian officials. "I know they (OPEC) are very interested that
we cooperate with them as closely as possibly," Shmatko told Reuters
in the Armenian capital, Yerevan, where he was traveling with the
delegation of Russian President Dmitry Medvedev. "We will stick to the
formula of bilateral strategic partnership between Russia and OPEC. We
see a lot of positive things (in this partnership) but we want to
have the possibility of having fairly independent policies," he said.
OPEC countries, which pump about 40% of the oil produced globally,
are widely expected to agree on cutting output at an emergency meeting
on Friday in an attempt to support oil prices that have halved since
peaking in July. OPEC President Chakib Khelil said on Monday non-OPEC
oil producers like Russia, Norway and Mexico should contribute to
production cuts because, if oil prices fall below $70 a barrel,
many international oil projects "will be delayed or die."
Shmatko said he was aware that OPEC would decide to cut production
but could not say by how much. "This is an extraordinary meeting and
it may take some important decisions, maybe (to cut) in two stages,"
he said. He added that Russia would rather cooperate with OPEC on
research and technology issues. â~@~^It is one thing cutting or not
cutting oil output. But there is also the general assessment of the
production sector, of new technologies that need to be developed and
investment that is required," Shmatko said. "Possible international
cooperation in order to share these technologies and mutually develop
is what we are really interested in."
Russia’s prospects
Shmatko said falling oil prices and the global financial crisis
were likely to persuade Russian oil companies to cut spending
significantly. "The oil price is now falling. I think investment
programs will of course be revised … I also think there will be
a significant correction in the oil sector as far as the current
spending is concerned," he said. Shmatko said his ministry was not
going to revise its positive oil production forecast for this year,
despite a 0.8% year-on-year decline in the first nine months of
2008. He said his ministry had started talks with companies on the
possible impact of the financial crisis on production). â~@~^So far,
there’s been no panic," he said.
Oil production in Russia, the world’s second-largest oil exporter
and the largest producer outside OPEC, rose rapidly in the first
part of the decade, including a record 11% increase in 2003. Growth
has slowed in the last few years as oil deposits in western Siberia
become depleted and companies switch their attention to developing
hard-to-reach deposits further east. "Everyone is talking about slowing
demand. This is what automakers, metal producers are suffering from,"
said Shmatko. "But oil is always sold. There’s the question of price,
but we had this price 18 months ago and nothing happened. We were
increasing production." (Reuters)
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