Russia yet to finalize stance before OPEC+ considers deeper oil cuts

Russia agreed to reduce output by 228,000 barrels per day (bpd) to about 11.18 million bpd in 2019 as part of cuts agreed by the group known as OPEC+. (AFP)
Updated 03 December 2019

Russia yet to finalize stance before OPEC+ considers deeper oil cuts

  • Russia agreed to reduce output by 228,000 barrels per day to about 11.18 million bpd in 2019
  • But it pumped more than its quota in November, producing 11.244 million bpd

MOSCOW: Russian Energy Minister Alexander Novak said on Tuesday he expected this week’s meeting of OPEC oil producers and their allies to be constructive but said Moscow had yet to finalize its position in talks on possible additional supply curbs.
Russia agreed to reduce output by 228,000 barrels per day (bpd) to about 11.18 million bpd in 2019 as part of cuts agreed by the group known as OPEC+. But it pumped more than its quota in November, producing 11.244 million bpd.
The Organization of the Petroleum Exporting Countries, Russia and other producers, which previously agreed to reduce combined output by 1.2 million bpd or 1.2 percent of global demand until March, hold discussions in Vienna on Thursday and Friday.
“I will not tell you anything now as we are still finalizing our position,” Novak told reporters. “Let’s wait ... But I think the meeting, as usual, will be of constructive nature.”
Two sources said on Monday that OPEC+ was discussing cutting output by at least an additional 400,000 bpd, as Riyadh seeks high oil prices to balance its budget and help Thursday’s pricing for Saudi Aramco’s initial public offering (IPO). The Saudis have been lobbying others to deepen cuts.
Novak said Russia’s average cut was 195,000 bpd in November and said Moscow aimed to comply fully with the quota in December.
Russia earlier called for a change to the way its output is measured to exclude gas condensate, which accounts for about 7 percent-8 percent of Russia’s total oil production, or about 800,000 bpd.
Novak told reporters he planned to discuss excluding condensate from Moscow’s quotas at the OPEC+ meeting.
By excluding condensate and only taking into account oil production, Novak said Russia’s output could be about 225,000 bpd to 230,000 bpd less in December.
“That said, we will discuss with our colleagues to take into account our statistics the same way as for OPEC countries — excluding condensate,” the minister said.
Vagit Alekperov, chief executive of Russia’s No.2 oil producer Lukoil, said in comments broadcast on Tuesday that it would not be expedient to deepen global oil production cuts in the winter season, especially for Russia.
Russian data cites production in tons. Reuters uses a conversion rate of 7.33 barrels per ton of oil.


Frank Kane’s Davos diary: Swiss efficiency lapses, but so far Davos lives up to the cuckoo-clock image

Updated 22 January 2020

Frank Kane’s Davos diary: Swiss efficiency lapses, but so far Davos lives up to the cuckoo-clock image

Davos comes and Davos goes, but over the last five decades, the one thing you can rely on is Swiss efficiency, right? The trains run on time, the cuckoo clocks chime on the hour, and the snow is swept from the pathways within minutes of the first fake falling. That is the common (even cliched) view of the Alpine nation and its showpiece event, the World Economic Forum (WEF) annual meeting in Davos.

But — and whisper it very gently beneath your breath — maybe the legendary standards of Swiss efficiency are slipping as the WEF celebrates its 50th birthday. Evidence of a lapse from the highest levels of attainment came at Zurich Airport, when the luggage belt seized up inexplicably, and a full 10 minutes elapsedbefore a maintenance man came to attend to it. Tut tut.

Further signs of falling standards were on display at the railway station. The booking desks were besieged, as usual, by WEF delegates keen to complete the final leg of their journey up the Magic Mountain — a two-hour rail journey involving two stops at increasingly higher altitudes.

But only two of the 10 grills were manned, and the line grew longer and more grumpy with each passing minute. The mood was not helped when some trains were canceled and an extra hour was added to the journey. There was much muttering and dark looks shot when the train finally pulled into Klosters.

But thankfully, once you got to the heart of WEF-land, normal service was resumed. There had been a reasonable fall of snow that morning, which gave the place its usual fairytale appearance, but no traffic snarl ups as in previous years, when massive snowfall had caused the place to grind to a halt.

The shuttle buses that are the arterial life-channels of Davos — for those whose budgets do not extend to the black Mercedes limo — were running with their usual Swiss punctuality: Every 10 minutes or so, or even more frequently during peak rush hours.

These, in my experience over the past few years, are becoming frequently extended. Having battled through the registration process and attended one event at the nearby Seehof hotel, I imagined it would be easy to catch a ride on a virtually empty shuttle back to Klosters at around 9.30 p.m. But even at that hour, there was a long queue of unhappy souls waiting to make the same 20-minute trip to the other side of the mountain and their warm, welcoming hotel rooms.

It was the same thing on the opening morning of the annual meeting. I left my hotel — the homely and comfortable Cresta in Klosters — at 7 a.m. in the dark, and at minus 5 degrees Celsius. Again, there was a crowd of people standing huddled at the shuttle stop, shivering and stamping their feet.

The WEF shuttle service was up to the job, however, and I got into the Congress Hall with little trouble. The airport-style screening process — maybe a little more thorough than usual in view of the impending arrival of US President Donald Trump — passed smoothly. One request though: Please WEF, install some hot-air machines in the security hall. The body shock when you remove outer clothing to pass through the metal detectors was wicked.

Then down to business, which for a journalist at Davos means finding somewhere in the congress complex where you can rest a laptop while also providing a good people-watching vantage point. Over the years, I have learned that the Central Lounge — strategically located between the main plenary meeting halls and the (private) members lounge and bilateral rooms — is the perfect spot. Now, who will come my way in Davos 2020?