Dvorkovich: Russia may cut oil production while maintaining a low price on the world market

GORKI, January 26. Deputy Prime Minister Arkady Dvorkovich did not rule out the fall of oil production in the Russian Federation with the lowest world market prices for these raw materials. He reported about it to journalists.

“The drop in production, according to our estimates, in the current situation, under the current system, and given the proposals to adjust the tax system in the energy industry, primarily with the introduction NFR, we can maintain production at the current level. But if prices are to remain at a low level, then some reduction is possible. About our partners – other countries – you know, we did not just say that. Our oil industry will react to the changing world situation,” – said Dvorkovich.

The Deputy Prime Minister noted that after a period of low investment in this sector in the whole world “oil prices will almost inevitably rise, but to what level nobody knows, and then production will start to grow again”.

According to Dvorkovich, the government may not engage in direct regulation of oil production, it is the prerogative of companies operating in the oil sector. They make investment decisions within the framework of the existing system of regulation and the tax system in the energy industry. “In this system there is no regulation of the powers of the government to increase or reduce the volume of production. Another thing is that if prices are low, taxes are rising, it is clear that incentives for investment less, and this may lead to some drop in production,” – said Dvorkovich.

As previously reported by the Russian energy Ministry, oil production in Russia in 2016 could remain the same as last year and will be 533-534 million tons.