Rosneft touts extra oil capacity
VERONA, October 20, 2016 – As analysts hold their breath over a potential deal between OPEC and Russia to limit production, Rosneft said on Thursday it had the potential to ramp up output significantly.
“If the market needs it and there are technological and economic grounds, Russia may significantly increase oil production in the future by up to 200 million tonnes [1.47 billion barrels],” Rosneft’s CEO, Igor Sechin, told the Eurasian Forum in Verona, Italy.
This is some 4 million bopd, while the oil production cut deal that was originally expected during the World Energy Congress in Istanbul last week envisioned a reduction of global output by some 200,000-700,000 bopd.
Sechin added that he was not threatening to up production to sabotage the agreement but was referring to a time when the global supply glut would be over and oil would cost at least USD 55 per barrel.
“In the next year and a half we should see the end of surplus and the start of the process of the situation normalising,” Sechin said.
The Russian and Saudi energy ministers are to meet over the weekend to discuss the deal further, Reuters reported.
Russia is already the world’s largest oil producer. With several new fields coming on line this year, its output rose by some 4% between August and September to about 11.1 million bopd. Russia has reportedly been trying to negotiate with OPEC the option to freeze rather than cut production.