Russia cannot disclose plans on OPEC+ deal yet

Russia’s position on the future of the OPEC+ agreement cannot be disclosed yet, Russian Energy Minister Alexander Novak said.

He said there was no decision yet on whether to exclude Russian gas condensate from how its output is measured under an international agreement to curb oil production, Reuters reported.

"We are holding discussions, making calculations," Novak said ahead of his meeting with Russian oil companies in Moscow. The companies have been invited to the ministry to discuss a meeting of OPEC and non-OPEC producers scheduled in Vienna next week.

The Joint OPEC-Non-OPEC Ministerial Monitoring Committee (JMMC) meeting and the OPEC meeting will be held on December 5. The OPEC and non-OPEC meeting is expected to be held on December 6.

The OPEC+ production reduction pact aimed at stabilizing crude prices is valid until the end of March 2020. In total, the countries participating in the agreement (24 crude exporters, including Russia) should reduce production by 1.2 mln barrels per day to the level of October 2018. Under the deal, OPEC and non-OPEC nations are obliged to cut their oil output by 812,000 and 383,000 barrels per day, respectively.

A senior analyst of 'Uralsib', Alexei Kokin, speaking to Vestnik Kavkaza, noted that Novak’s words suggest that certain initiatives continue to be discussed behind the closed doors. "One of the conditions for the success of such negotiations is confidentiality, that is no preliminary statements are made until the parties come to an agreed decision," he explained.

"At the same time, it is clear that Russia is unlikely to refuse the deal - it is valid until the end of the first quarter of 2020. In general, there are three options: extension of the deal until the end of next year, extension until the middle of the year, or transfer of this issue to the next meeting early March. I would expect the second option," the senior analyst of 'Uralsib' pointed out.

"Due to the increase in condensate production, Russia would like to be withdrawn from the quota. If this happens, Russia will be more understanding of the proposals to extend the deal," Alexei Kokin concluded.