Alekperov expects the average annual price of oil in 2016 to $50 a barrel, maybe higher

Alekperov expects the average annual price of oil in 2016 to $50 a barrel, maybe higher

MOSCOW, December 24. The average price of oil in 2016 will hover near $50 per barrel. Such forecast was made by the President of “LUKOIL” Vagit Alekperov in an interview with TV channel “Russia 24”.

He noted that in the approved by the Board of Directors the company’s budget for 2016 assumes the price of $50 per barrel. “We have a stressful scenario at $40 per barrel. There are derivative calculations of $30,” – said the head of the company.

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“I am deeply convinced that, most likely, the average price of 2016 will range somewhere within $50, maybe even higher,” Alekperov expects.

The fall of quotations Brent from the highs of June 2014, close to 70%. Earlier in December, Brent crude dropping to its lowest level since 2004, down to 36 dollars/Barr. For comparison, in December 2008, the Brent price dropped to $36,2 per barrel, down 75% in 5 months.

Oil prices accelerated their decline after the OPEC meeting on December 4. According to the results of 168-th meeting in Vienna Ministers of oil of the OPEC has not taken a clear decision on production quotas because of the position of countries that are not members of the organization. Currently the volume of oil production by OPEC members is estimated to be 31-32 million barrels/day. The previous quota was 30 million barrels/day.

Stable work industry

The head of LUKOIL said that the stable operation of Russia’s oil industry when oil price at $50-$60 dollars per barrel.

“I believe that today the stable work of the oil industry of the Russian Federation is, of course, the price is somewhere $50-$60 while maintaining the tax, which was approved, while maintaining the rules of the big maneuvers,” he said.

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Alekperov stressed that the production of “LUKOIL” can remain profitable at a lower oil price, but the company will have to reduce investments and cease to develop their projects. “If we stop the investment, and won’t think about the future – about exploration, about the preparation of new fields to enter, and to work on the fall production, we will of course be able to work at any price”, – said the head of “LUKOIL”.

Earlier the General Director of “Gazprom oil” Alexander Dyukov said that the production of traditional fields of his company will remain profitable even at oil price of $15 per barrel.

The lifting of the embargo

He also noted that the lifting of the ban on exporting U.S. oil will not lead to an overload of the oil market.

“The U.S. is the largest importer of oil. Most likely, removal of these restrictions on oil exports remap the streams. Still, the U.S. will export more light crude, which is valued above the market and buy more difficult,” he said.

“Additional amounts in the lifting of the embargo the U.S. market does not appear”, – said Alekperov.

LUKOIL sells its assets in Lithuania and Latvia

He also said that LUKOIL decided to sell its assets in Lithuania and Latvia. This decision of the President of “LUKOIL” Vagit Alekperov explained the increased in these countries, anti-Russian sentiments.

“There are some countries where we are experiencing difficulties, – said Alekperov. – Among them Ukraine, where we were forced to sell their assets, although they were one of the best”.

“We have sold assets in Estonia. Today we are selling our assets in Lithuania and Latvia, where a fairly serious anti-Russian sentiments, therefore, the Board of Directors has decided to withdraw from these countries,” – said Alekperov.

The strategy of “LUKOIL” does not imply expansion in Europe in the coming years, he said. “We approved the strategy, the extension only in the segment of exploration and oil production. We believe that the system created by the company in downstream, neftepererabotki and implementation of oil refining, – she today provides our streams”, – said the head of “LUKOIL”.

In the summer of 2015 Estonian fuel company Olerex acquired 100% of shares in the subsidiary of “LUKOIL” in Estonia Lukoil Eesti AS, which owns 37 stations.

“Daughter” of “LUKOIL” in the Netherlands, Lukoil Europe Holdings owns 100% shares of Lukoil Baltija, which owns a network of filling stations in Latvia and Lithuania.


Oil prices for 30 years