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UPDATE: Lukoil: OPEC Expects Russia To Cut Oil By 300,000 B/D340 days ago
(Adds detail, background.)
MOSCOW (Dow Jones)--The Organization of Petroleum Exporting Countries expects Russia to cut its production of between 200,000 and 300,000 barrels a day, Vagit Alekperov, chief executive of Russia's biggest independent oil firm OAO Lukoil (LKOH.RS), said Monday.
OPEC member states meet Wednesday in Algeria to discuss lowering production for the third time this year, with oil prices now around a third of record levels reached in July. Members have called for non-OPEC producers, including Russia, to join the cut.
Sunday, Algerian media cited OPEC President Chakib Khelil as saying the group has reached consensus to cut production and that Russia is likely to follow suit.
Russia, the biggest producer of crude oil outside OPEC, asked to broaden its cooperation with OPEC at a meeting in Vienna earlier this year and said during a recent visit to Moscow by OPEC Secretary-general Abdalla Salem El-Badri that it may store some oil to buoy prices.
Last week, Russian President Dmitry Medvedev said Russia may lower oil output to support prices and the country could even seek to become an OPEC member. Higher oil prices are vital for Russia federal budget revenue and trade balance.
A high-level Russian delegation, including Deputy Prime Minister Igor Sechin, Energy Minister Sergey Shmatko and Lukoil's Alekperov, will participate Wednesday's OPEC meeting.
A cut of 300,000 barrels a day would make up 3% of Russia's total production, which will reach around 9.8 million barrels a day this year. Analysts, however, said Russia's output is likely to continue to fall as producers cut capital spending. Some expect Russia daily output will fall by up to 400,000 barrels next year.
Also, the mix of state and privately held oil companies in Russia raises the question of whether the government can force producers to cut output.
Alekperov said Lukoil will follow any decision made by the government to cut production.
Last week TNK-BP Holding (TNBP.RS) and OAO Gazprom Neft (SIBN.RS), the country's number three and number five oil producers, both spoke against the possibility of Russia cutting production along with OPEC.
Company Web site: www.lukoil.com
-By Jacob Gronholt-Pedersen, Dow Jones Newswires; +7 495 937 8445; jacob.pedersen@dowjones.com
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