The head of BP: OPEC countries and other producers will not cut oil production

The head of BP: OPEC countries and other producers will not cut oil production


LONDON, 10 February. The members of the Organization of countries-exporters of oil (OPEC) and producers outside the organization, including Russia will not cut oil production to maintain prices, told reporters the head of company BP Robert Dudley.

A number of OPEC countries, which is gradually losing its influence in the oil market, requires the convening of an extraordinary meeting of the organization for decision making about production cuts. The main OPEC member Saudi Arabia, which is struggling to maintain its market share, while not interested in convening such a meeting.

“I don’t see such a possibility in the short term. Don’t know about the long-term prospects. But now people are determined to implement their projects and to increase production,” said Dudley, answering the question about the possibility of reducing production by producing countries.

The increase in the share of BP in “Rosneft” over 20% “impractical”

Robert Dudley also said that the leadership of the British oil company BP considers it “impractical” to increase our share in “Rosneft” more than 20%.

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OPEC lowered its forecast for growth in world oil demand in 2016 to 10 thousand barrels per day

Currently BP owns 19,75% of Rosneft shares. The Russian government is discussing the possibility of further privatization of the company.

“When you have over 20% it gets more complicated with operational and management point of view. I think we should stay at this level without the need to hold meetings about each trade, or if you need to make a decision about the shipment, it will be a little impractical for us. This is our limit,” said Dudley.

The head of BP doubts the effectiveness of sanctions against Russia

Dudley also expressed doubt that sanctions against Russia effective. “I’m not sure that the sanctions are effective. And they can harm anyone”, – said the head of the British oil and gas company.

“As the old saying goes: “the Boundaries through which there is a trade seldom need soldiers,” said Dudley and explained that as long as politicians decide on the imposition of sanctions, to business plays a critical maintaining trade relations. “It is important that trade was to the country and culture were combined. This (sanctions) is a decision of politicians,” said Dudley.

The opinion of the analysts

Russia can find a technical possibility to reduce oil production along with OPEC, including at the expense of natural production decline and export, respectively, but agree on consolidated actions and mechanisms for monitoring agreements will be difficult, according to analysts surveyed.

Talk about the decline of world oil production to normalize prices going for a long time. At the OPEC summit, which took place in December last year, the cartel failed to agree on the size of the production quotas, and decided to raise it to the level of actual production. This has led to a sharp decline in prices. The Minister of oil of Iraq has noticed that the decision was taken because of the reluctance of countries outside the cartel, including Russia, to reduce their prey.

See also

The world Bank predicts rise in oil prices to $50-60 in the long run

“We are technically very difficult to reduce production in winter is impossible, as we extract oil, but the downhole fluid. It is 80-90% water. If the well is stopped, it may explode. Stop only in the warm season, for example, do when repairing well”, – the analyst of Sberbank CIB Valery Nesterov.

Experts believe that even if oil-producing countries would cut production, it will not lead to the desired result. Analyst of oil and gas branch of Raiffeisenbank Andrei Polishchuk believes that if Saudi Arabia will reduce production by 5%, this share will get Iran.

From reduced production will only benefit US companies, extracting shale oil. “If we agree and the price goes up, it is unclear how they will behave producers of shale oil in the United States. While I assume that they will massively come back, open those wells that are now plugged, production will increase dramatically and price will fall again. Win no. The same price of $30 can be seen through the year”, – said Nesterov.

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Oil prices over 40 years

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