Energy
Security
Ex-Energy Minister: Russia Could Trim Oil
Exports to Boost Prices
Reuters
Dec. 29 2014 15:44
Last edited 15:44
Sergei
Porter / VedomostiIgor
Yusufov
Russia may help OPEC to prop up global oil prices by slightly
cutting exports in favor of domestic refining, the country's
ex-energy minister and a former negotiator with OPEC, Igor Yusufov, told
Reuters.
Yusufov, who says he still regularly meets with Gulf OPEC oil ministers,
no longer holds any major official position and runs an energy
investment company.
He led a delegation which discussed cooperation with OPEC
in 2001 and 2002 to support global oil prices and agreed
modest cuts, although Russian state and private producers never followed
through, in fact increasing exports instead.
Russia, which is pumping an average of 10.5 million barrels
per day, is not an OPEC member. Its production has peaked in recent
years after steep rises in the early 2000s.
"We have stable volumes — the question is whether we will
increase production … I do not rule out that if we, for example, slightly
cut exports, it won't be something terrible. It is a question
for each particular company which let's say may refine more in Russia
and sell on the domestic market," he said.
Moscow needs oil prices of $100 a barrel and above
to balance its budget. Its finances have been severely hit by Western
sanctions over Russia's role in the Ukraine crisis.
Unlike its closest peer Saudi Arabia, the leading player
in OPEC, Moscow says it cannot easily cut oil output due to severe
weather conditions and a lack of storages. It may increase domestic
refining or postpone bringing new fields on stream, says Yusufov.
Russia is gradually cutting crude supplies to the global market as
it is increasing domestic refining capacity. Russian oil exports are seen down
by a total of 12 million tons between 2013 and 2015.
In November, Russia sent a delegation led by Energy
Minister Alexander Novak and Igor Sechin, the CEO of state oil
giant Rosneft, to Vienna ahead of an OPEC meeting.
No agreement was reached and OPEC kept its output targets
unchanged, triggering a further sell off in oil prices, which are now
down almost a half to $60 per barrel from this year's peaks
in June.
Yusufov said he did not expect prices to fall further, staying in the
range of $60-80 per barrel in 2015.
"This is a reasonable corridor which will suit everyone,"
he said. Yusufov added that Russia needed a special envoy
to coordinate dialog with OPEC and global energy firms.
Energy minister from 2001 to 2004, Yusufov made headlines
in 2012 when his bid to save the Coryton refinery
in Britain was rejected and it was closed.
Yusufov said he was still looking to buy a refinery
and turn it into a terminal to help deliver Russian oil
to Europe. He also said he was looking to invest in filling
stations.
In Russia, Yusufov's Fund Energy works with U.S. oil services firm
Halliburton to develop a $900 million Yamal project due to start
in 2017-2018 with output peaking at 3 million tons of oil
and 1 billion cubic meters of gas a year.
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