Dubai: Russia, the world’s biggest energy producer, is "on board” with an Opec agreement to limit crude oil production to help re-balance the market, according to the group’s Secretary- General Mohammed Barkindo.
Members of the Organisation of Petroleum Exporting Countries (Opec) remain committed to an agreement they reached in Algiers in September to trim output, and cooperation from non-Opec producers will help bring the oil market back into balance, Barkindo told reporters at an energy conference in Abu Dhabi. Russia is due to join Opec for talks later this month in Vienna, where the group will convene for its bi-annual meeting.
"We as Opec remain committed to the Algiers accord,” Barkindo said Monday. "I have heard from the highest quarters in Moscow that Russia is on board.”
Opec, which pumps about 40 per cent of the world’s oil, is trying to persuade producers from outside the group, such as Russia, to join the cuts. The organisation’s members want to put the changes into effect when they meet in Vienna on Nov. 30. The group has held talks over the past weeks with producer nations Russia, Azerbaijan, Brazil, Kazakhstan and Mexico.
Producers from outside Opec need to join the group in cutting output, Eni SpA CEO Claudio Descalzi said in a Bloomberg TV interview from Abu Dhabi. "Opec alone is not enough,” he said.
Russia, the world’s largest energy producer, pumped at a post-Soviet record of 11.2 million barrels a day last month. With new fields ramping up production and more due to start producing before year-end, its output may climb further. Energy Minister Alexander Novak indicated that Russia was willing to freeze production for six months or more, rather than cut, and only if Opec reached an agreement first.
The Algiers accord helped push oil prices to a 15-month high above $50 a barrel, but crude has subsequently fallen as several Opec states disputed production estimates that would determine the size of cuts by individual members of the group. Benchmark Brent crude was 0.7 per cent higher at $45.89 a barrel on Monday at 3:08pm in London.
Opec’s internal disagreements have also prevented a deal so far to secure the cooperation of other major suppliers after rounds of talks in Vienna. The producers will meet again later this month in Vienna.
Without a deal, Opec will return to the policy of pumping without limits to secure sales, author and energy consultant Daniel Yergin said in an interview at the conference. Opec members Iraq and Iran represent a "sticking point” that needs a resolution if there is to be agreement to limit production, he said. Both countries have asked to be exempt from any production cuts. "If there isn’t an agreement, it’s back to battle for market share.”