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Russia sees some Opec cooperation beyond 2018

06 Mar 2018 15:04 GMT
Russia sees some Opec cooperation beyond 2018

Houston, 6 March (Argus) — Russia expects to continue cooperating with Opec countries to help stabilize oil markets beyond 2018, regardless of whether the Opec/non-Opec production cut agreements are renewed, Russian deputy energy minister Alexei Texler said.

"The alliance will not just disappear — it will become a new format of partnership," Texler said at the CERAWeek conference in Houston today. Further cooperation is needed to provide stability for investments and keep down market volatility, he said.

The format of further cooperation is up for discussion, however, and could take place under an existing group like the Gas Exporting Countries Forum, Texler said. The original goal of the agreement — a return to five-year average commercial oil stocks in OECD countries — is not likely to be achieved until the second half of the year, maybe not until September, Texler said.

But Russia already is looking beyond the production cuts agreement and is keen to preserve its share of the market. "The agreement is holding back some projects and after the end we will analyze the situation. We plan to keep our market share," he said.

Russia's crude output was around 10.9mn b/d in January. Russia has agreed to hold output at 10.88mn b/d — 300,000 b/d below an October 2016 baseline of 11.18mn b/d.

Post the agreement, "the main challenge is that some reserves in west Siberia are being depleted so keeping production levels at current levels is a difficult task, technologically," Texler said.