On November 25th, Rosneft Head Igor Sechin took part in International Oil Conference in Vienna. The meeting was also attended by the Russian Minister of Energy Aleksandr Novak, the Saudi Arabian Minister of Petroleum and Mineral Resources, Chairman of Board of Directors of Saudi Aramco Ali bin Ibrahim Al-Naimi, the assistant of the Saudi Arabian Minister of Petroleum and Natural Resources Prince Abdulaziz bin Salman, the Mexican Energy Minister Pedro Joaqu?n Coldwell, and the Venezuelan Foreign Minister Rafael Ramirez, who initiated the conference.
In his speech Igor Sechin indicated that the participants of the conference account for almost 30%, and with input of close associates, more than half of global oil supply. However consultations at such level were held for the first time driven by the necessity to discuss openly the key issues on the oil agenda.
Over the last five months crude oil prices have reduced by approximately 40 dollars per barrel. Retrospective analysis of the recent crude oil prices behavior shows indications of a global economic crisis, however global economy and oil demand are growing. Furthermore no critical supply and demand imbalance is observed in oil markets.
“I’d like to note that the current level of prices is not critical to us. We can reschedule some of capital intensive projects. This will definitely impact overall oil supply”, said Igor Sechin.
Head of Rosneft considers that to ensure supply and demand balance, all or the majority of oil market players need to take agreed and coordinated actions. At the same time Igor Sechin underlined that one should clearly differentiate the specific nature of the oil industry in the majority of OPEC states and Russia. Given the climatic, logistical and technological factors Russia cannot immediately cut production, but is capable of taking structured measures with mid-term and long-term implications.
Igor Sechin noted that Rosneft already cut production volume by 25000 b/day, which is associated with production efficiency boosting and enhancement of efficiency for Company shareholders, and also with marketing conditions.
Rosneft Head also believes that market players should be responding to market changes more proactively, and to this end it is required to jointly step into in-depth market research and analysis, and do it on a regular basis. It is also fundamental to increase market transparency.
Members of the conference agreed to monitor the situation in the next year and analyse the possibility of holding additional consultation quarterly.