Moscow — Russian and Saudi companies could ink new joint investment deals before the end of this year, further expanding cooperation between the two countries in the energy sector, according to Russia's energy minister Alexander Novak.
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"We have a number of good projects [under discussion], including between Saudi Aramco, Sibur and Novatek," Novak said in an interview with Russia 24 state TV network, broadcast Tuesday.
"Talks between the companies continue. As soon as they reach the final stage, and it is clear that they have agreed, it will be possible to visit Saudi Arabia. I hope this will happen this year, as discussed with my colleague minister Falih," Novak said.
Novak was answering a question indirectly raised by Saudi energy minister Khalid al-Falih, who said last week that new deals between Russian and Saudi companies may be signed during Novak's next visit to the kingdom.
The move would accelerate investment cooperation between the two countries, as Saudi Aramco and many Russian companies have held "very intensive contacts" both during the latest visit and earlier, Falih said.
Cooperation in oil services, petrochemicals, gas and other spheres has been discussed, he reiterated.
Saudi Aramco has already inked a deal with Gazprom Neft on a joint technology center in St Petersburg to address challenges on developing oil reservoirs. Other memorandums between Aramco and Russian companies include one covering oil swaps and trading with Lukoil; gas cooperation "along the entire gas production chain" with Gazprom; and a wide range of projects with Russia's top oil producer Rosneft.
Saudi Aramco is also looking into LNG, with Novatek expected to select international partners for its second major LNG project, Arctic LNG 2, by the third quarter of 2019.
OPEC OBSERVER STATUS
Novak also confirmed that Russia is continuing to study the possibility of taking observer status at OPEC, although he reiterated that his country does not see the rationale in joining the organization as a full member.
"I think there is no necessity and expediency [to join OPEC] as this would envisage certain obligations," Novak said.
"We see that those tools that we use today -- when OPEC and non-OPEC countries have agreed [on joint actions] -- they are quite workable but we don't have any legal obligations that are fairly complicated," he said.
"It's important to weigh up everything seriously," he said, reiterating that the current cooperation with OPEC has proved its efficiency, helping to rebalance markets and support prices.
The OPEC/non-OPEC production cut deal, effective since January 2017, saw 24 countries cooperating to reduce their combined output by 1.8 million b/d to stabilize the market, with nearly all participants showing a surprisingly high compliance to their obligations.
In June, OPEC and its allies agreed to adjust individual oil production caps according to each member's ability to pump more crude under a plan to add up to 1 million b/d of supply. This has seen both Russia and Saudi Arabia increase output, amid concerns over supply shortages in the wake of US sanctions against Iran.
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