The Organization of Petroleum Exporting Countries (OPEC) has invited Russia to become its member, Rosneft CEO Igor Sechin said. He noted that the talks held between Russia and OPEC are quite positive, but Russia will remain an observer in the group.
The head of the oil company also noted that in OPEC countries oil production is carried out by public companies, while in Russia the oil industry is private. Sechin pointed out that because of climatic conditions in Russia it is not possible to quickly adjust the oil output.
According to him, due to these circumstances the Russian government prefers observer status in OPEC. Sechin also said that this organization has lost its functions as a market regulator, so there is no sense in Russia joining OPEC.
Meanwhile, active consultations between OPEC and non-member countries are continuing amid plunging oil prices, TASS reports.
A senior analyst of 'Uralsib Capital', Alexei Kokin, told Vestnik Kavkaza that he agrees with Igor Sechin, saying that it is unlikely that Russia will join OPEC due to technical reasons.
"Firstly, indeed, oil production in Russia is not carried out exclusively by public companies, in contrast to most of the OPEC countries, and it would be rather difficult to control private companies. Secondly, it is quite difficult to change the level of oil production in our country for various reasons," he noted.
"Russia, in contrast to OPEC states cannot arbitrarily increase production. This is due to our geology and some features of the infrastructure. Still, there is a significant presence of the private sector in Russia, making it difficult to technically coordinate a reduction or increase of production," the expert explained.
"Thus, there will be no benefit from Russia joining OPEC. As a result, without the benefits the Russian Federation would only assume new obligations, which would threaten long-term oil production," Alexei Kokin said.
The president of the Union of Oil and Gas Producers of Russia, member of the Council for Information and Cooperation of the Fuel and Energy Complex, Gennady Schmal, also said that Russia's accession to OPEC is both impossible and unnecessary.
"On the one hand, Russia cannot join OPEC. On the other hand, it is not necessary," he said.
"OPEC consists mainly of countries with state-owned oil companies. Russia can instruct Rosneft, Gazprom and Gazpromneft, but the state can't order Surgutneftegaz, Lukoil and a number of other companies how much oil or gas they should produce," the expert explained.
As the Russian economy is largely based on income from oil and gas, according to Schmal, the decrease in production will not bring any good.
"We need to come into contact with OPEC, to work with it, to participate in its activities. But there is no need to join OPEC," Gennady Schmal concluded.
