Novak: consolidated position on reduction of oil production in OPEC no

ANTALYA, November 16. The consolidated position for the reduction of oil production in OPEC is no, said the head of Ministry Alexander Novak.

“This, shall we say, shared desires and needs to make a decision on the reduction (of oil production), such a consolidated position there. There are some countries that offer this approach, but there is no consolidated position”, – said the Minister. He stated that he regularly discusses the current situation in the oil market with OPEC colleagues.

Experts believe that the oversupply in the global oil market may be balanced in the second half of 2016, also said he.

According to Novak, at the beginning of the fall in oil prices the imbalance of supply and demand was estimated at about two million barrels per day, but now the volume of production in some countries is decreasing.

“So this imbalance is slowly decreasing, but it cannot be quickly reduced. In our opinion, the inertia reduction of the imbalance (saved) in 2016, said the Minister. – Most (experts) agree that it (the imbalance) will disappear in the second half of 2016, this excess supply that exceeds the growth of demand, it will be (balanced)”.

Novak has forecasted that the oil price of $50-60 per barrel in the medium term will reflect the balance of supply and demand in the global market.

The consequences of artificially lowering prices

According to him, the artificial reduction in oil prices will lead to even worse consequences for oil production in the medium term, it’s all you know. “We have a common understanding that the artificial reduction of (production) will lead to even worse consequences in the medium term. It’s all perfectly understand,” said the Minister.

He explained that in this case, when the artificial increase in oil prices, investment in inefficient projects will be continued, “which in turn will again lead to oversupply in the market.”

“Therefore, it is important that the market was balanced and that these expensive investments in inefficient projects left the market. With the high price it will not occur. And then even more may be a price drop, if it is to artificially raise, and then drop”, – concluded the head of Ministry of energy of the Russian Federation.

Oil production in the Russian Federation

Oil production in Russia in 2015 will amount to 533 million tonnes, higher than last year, also pointed out the Minister. We in terms of production maintain the achieved levels that were. Even this year there will be some increase: last year we had 526,3 million tonnes this year, according to the companies, we expect to 533 million tons”, – said the head of the energy Ministry, adding that this was higher than forecast and strategically plan corresponds to the level of 525 million tons.

According to him, Russia will retain competitiveness in the global oil market and low energy prices. “We have, in principle, the cost of production is not much different from the leaders who have the lowest cost, so we are absolutely competitive,” the Minister said. According to him, in Russia the lion’s share in the oil price is tax, and the cost of some of the deposits can be from $3 to 15. “Us prices in principle are not afraid”, – concluded the Minister.

While Novak acknowledged that low energy prices have a negative impact on the Russian economy, as the country receives less foreign currency revenue, which is one of the factors affecting the rate of the national currency. “Although in ruble terms for our companies revenue essentially remains at the same level it was previously,” he said.
Task in the field of competition with global players in the oil market Nowak has called improving the efficiency of private oil companies.

Investments in the oil complex of Russia in 2015 will amount to 1 trillion 188 billion, also said Novak. “If you see globally there is a reduction of the investment when prices fall, in Russia, on the contrary, this year we note the growth of investments. Last year was 975 billion in the oil complex, this year we expect, according to the companies, $ 1 trillion 188 billion rubles”, – he said. According to him, such growth of this indicator occurred on the background of weakening of the ruble to the dollar.