Russia has no plans yet to cut crude production: energy minister

11/21/2014

Russia has no plans yet to cut crude production: energy minister

DINA KHRENNIKOVA

MOSCOW (Bloomberg) -- Russia has no current plan to reduce its output to arrest the decline in global prices, according to its energy minister.

The Russian government has discussed a cut, Alexander Novak said today in Moscow. It hasn’t made a final decision because the economy is heavily dependent on oil revenue, he said. “We expect annual oil production levels of 505 to 520 MMt now and in the future,” Novak said.

Output of 505 MMt is equivalent to about 10.1 MMbopd, while Saudi Arabia’s output last month was 9.75 MMbopd last month, according to Bloomberg estimates. Oil and gas account for more than half of Russia’s budget revenue.

Oil collapsed into a bear market this year as the U.S. pumps crude at the fastest rate in more than three decades amid signs of weakening demand. Saudi Arabia is the biggest producer in the Organization of Petroleum Exporting Countries which meets Nov. 27 in Vienna to discuss its production ceiling.

Russia is technologically unable to increase or decrease oil output quickly, Novak said, adding that he will be in Vienna on Nov. 25 for an oil conference.

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