(Reuters) – Russia needs to start working with OPEC to cut oil supplies to the world market in a bid to support prices, Leonid Fedun, vice-president of Russia’s No.2 oil producer Lukoil, was quoted as saying on Monday.
Russia, the world’s top oil producer, has long refused to cooperate with OPEC while regularly meeting officials from the cartel. OPEC has always said it would agree cuts if other producers such as Russia joined to move.
“In my opinion, if such a political decision is taken, Russia should jointly work with OPEC to cut supply to the market … It’s better to sell one barrel of oil at $50 than two barrels at $30,” Fedun told TASS news agency in an interview.
Russia’s oil production hit a post-Soviet high of 10.83 million barrels per day (bpd) in December, adding to the glut on global markets as output was supported by a weaker rouble.
Lukoil’s oil output exceeded 100 million tonnes (2 million bpd) last year, the company said earlier. It did not give a break down by regions, although energy ministry data showed it was pumping an average of 1.7 million bpd in Russia alone.
Fedun, a mastermind of Lukoil’s expansion abroad, said the company’s output was unlikely to remain as high as last year.
“The practice of filling the market with cheap oil at any cost is wrong – half a year or a year later it could be sold at twice as high,” he said. Fedun did not give a figure.
He added Lukoil was preparing to cut production at its West Qurna-2 project in Iraq.
“Earlier, the Iraqi government said that they are ready to take out 300,000-500,000 bpd from the market. Our share will be proportional,” Fedun told TASS.
Iraq was pumping an average of 4.2 million bpd in December, according to a Reuters survey, with production at West Qurna-2 last reported at 450,000 bpd. (Reporting by Polina Devitt; Writing by Dmitry Solovyov and Katya Golubkova; Editing by Mark Potter)
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