Russia and OPEC countries are studying various mechanisms to stabilize oil production volumes, Russian Energy Minister Alexander Novak said at a press conference in the framework of the "Energy Dialog Russia-OPEC" on Monday, TASS reports.
"We are working on various options and mechanisms for OPEC and non-OPEC countries. Now a more detailed study of specific proposals within OPEC is in progress. The proposals will be discussed in November at the next conference," the minister said.
Russia considers an option of either freezing or reducing oil production in terms of acting together with the OPEC, Novak said. "We are viewing different options," the minister said responding to a question whether Russia is ready to reduce oil production instead of freezing it.
Different scenarios exist and "undergo estimation" in terms of discussed parameters and mechanisms, Novak said. "As for the parameters and mechanisms we are discussing - there are different scenarios and calculations are being made. Not only for OPEC and Russia, the whole volume of production and demand is being discussed in order to come up with as precise forecasts as possible," he said.
Russia has not yet made final decision on the way of stabilizing oil production through reduction or freeze, Novak said earlier. Novak told reporters earlier that the issue of freezing oil production will be discussed during the talks, but will not be the main topic. According to him, the energy dialogue is a traditional format for discussing other issues that do not concern freezing oil production and market coordination. It includes analysis, monitoring of the situation in the world oil markets, exchanging the best practices in taxation, modern technologies.
The OPEC countries managed earlier to agree upon the oil production limit of 32.5-33 mln barrels daily at the informal meeting in Algeria on September 28.
According to the minister, Russia and OPEC countries agreed to join efforts in information and analytical interaction. "We agreed with our colleagues and the OPEC that we will join hands in terms of information and analytical studies and analysis separately performed by the OPEC and Russian specialists now. We want to have a synergetic effect in this regard," TASS quoted him as saying.
In an interview with Vestnik Kavkaza, deputy director of the Energy and Finance Institute Alexei Belogoryev expressed confidence that any significant agreements are unlikely to be signed in Vienna. Overall, it is not even really necessary, because we already has a meeting in Algiers a month ago, after which the Russian side has repeatedly voiced, including at the presidential level, its willingness to take part in the freezing of production, if necessary," he pointed out.
Sberbank CIB analyst Valery Nesterov believes that the issue production freeze itself may lose its relevance due to the fact that the situation with supply and demand on the oil market has improved. "The mood regarding the reduction of surplus in the oil market is quite optimistic," he said.
In addition, there are several factors that can raise the price and without "freezing" production. "I would like to draw attention to the aggravation of confrontation between the parliament and the president of Venezuela: tense political situation in the country may result in failure of Venezuelan oil export, which will immediately lead to changes in the market. In other words, right now there is no need to artificially reduce production levels, especially since there is an understanding that even reached agreements on 'freeze' likely won't be adhered to," he concluded.
