Putin ally absent as Russia considers joint action with OPEC

Thu Jan 28, 2016 7:41am EST
 
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By Dmitry Zhdannikov and Vladimir Soldatkin

LONDON/MOSCOW (Reuters) - When Russian officials this week discussed the merits of jointly cutting oil output with OPEC to push up prices, one man -- President Vladimir Putin's ally Igor Sechin -- was conspicuous in his absence.

The no-show by the chief executive of Russia's biggest oil producer, Rosneft, at Wednesday's meeting of oil executives and government officials and his silence suggests the Kremlin has not yet decided whether to back such a move.

The meeting raised the possibility of rare joint action with OPEC, of which Russia is not a member, because of a global oil glut but Kremlin spokesman Dmitry Peskov has said there is "nothing to talk about in a tangible sense" for now.

The final decision will lie with Putin but Sechin's input is likely to be crucial as Russia considers acting in tandem with OPEC for the first time since an ill-fated 2001 deal at the start of Putin's first presidency, when Russia promised modest cuts but raised exports instead.

Sechin has repeatedly made clear in public that Russia, the world's largest oil producer, will not blink first in the battle with OPEC over market share and pricing even though the Russian economy is highly dependent on oil exports and prices have sunk below $30 per barrel from $115 some 18 months ago.

At the table with oil minister Alexander Novak, billionaire executives of private Russian companies and state pipeline officials on Wednesday was Rosneft's chief financial officer, Svyatoslav Slavinsky, who said little about his boss's views, participants at the meeting told Reuters.

The meeting agreed Russia should talk to Saudi Arabia and other OPEC countries about output cuts, although the only OPEC members to clearly support a production cut so far are Algeria, Equador and Venezuela.

"It was a proper, serious discussion. But Sechin wasn't there and no deal is possible without him," said one person who took part in the meeting but asked not to be named because of the sensitivity of the matter.   Continued...

 
A general view of the OPEC building and logo in Vienna , November 7, 2013. REUTERS/Leonhard Foeger