Russian companies support extension of OPEC+ deal, without deeper output cuts

Moscow — Russian oil companies support an extension of the OPEC+ production cuts through to the end of the second quarter, but at current production levels rather than with any deeper cuts, company representatives said Wednesday.

The OPEC+ Joint Technical Committee last week recommended that the alliance of OPEC members, Russia and nine other countries cut production by an additional 600,000 b/d through the second quarter -- more than a third greater than the current 1.7 million b/d cut accord in place until the end of Q1 -- to support prices in the wake of the coronavirus outbreak.

Russia is yet to announce its position on the recommendation by the OPEC+ technical committee, with Russian energy minister Alexander Novak on Wednesday meeting with Russian oil producers ahead of the next OPEC, non-OPEC meeting in an effort to determine Russia's stance.

OPEC+ ministers are scheduled to meet March 5-6 in Vienna, though delegates have said the meeting could be moved forward to immediately implement the new cuts if there is a consensus to do so.

"We discussed everything, but the majority is inclined to extend the agreement for another quarter," Ravil Maganov, first executive vice president of Lukoil, told reporters after the meeting.

Most representatives voiced their support for extending the existing production cuts, not deepening them.

"Our company proposes to maintain current quotas. Given the current situation on the market, it makes sense to extend the agreement through the second quarter and then monitor," Gazprom Neft CEO Alexander Dyukov said.

The final decision on Russia's position would be taken by the Russian government, he added.

Russian producers are splitting the cut quota proportionally among themselves, but have repeatedly expressed concerns about the impact of complying with the deal on their longer-term development plans and market share.