Russian oil bosses voice support for oil output freeze, not cut

Tue Mar 1, 2016 12:42pm EST
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By Vladimir Soldatkin

MOSCOW (Reuters) - Russian oil companies back the idea to freeze output at near-record levels reached in January, but did not support any proposals to cut oil production to lift global prices, Energy Minister Alexander Novak said.

Russian President Vladimir Putin met the heads of the country's top producers, including Rosneft (ROSN.MM: Quote) Chief Executive Igor Sechin, Lukoil (LKOH.MM: Quote) CEO and co-owner Vagit Alekperov and others, to hear their views on last month's proposed output freeze.

Novak, who was negotiating the first potential global oil pact in 15 years in Doha, said Putin and the oil firms, which pumped at a new post-Soviet high in January at 10.88 million barrels per day (bpd), discussed the deal at the Kremlin.

"Companies have confirmed that they support this initiative and in general, this should give quite a positive signal to the market," Novak told reporters after the meeting.

"Our companies do not propose 'radical' measures. As you know, in our climate this is hard (to do) - if you are meaning proposals to cut production. We have discussed this option, too... but all supported the idea we discussed in Doha."

OPEC sources and delegates told Reuters on Tuesday that OPEC was very unlikely to cut output at its next meeting in June, as it will be too early to say how fast Iranian output is rising.

The sources said OPEC countries such as Saudi Arabia also want to test Russia's commitment to freezing output before taking any further steps to stabilize prices.

In opening remarks to what was the first official meeting with oil firms since the Doha agreement, Putin said: "our task is to maintain Russian oil sector's stability, ensure is development, implementation of long-term projects."   Continued...

Russian President Vladimir Putin delivers a speech during a congress of the Chamber of Commerce and Industry in Moscow, Russia, March 1, 2016. REUTERS/Alexei Nikolsky/Sputnik/Kremlin