Russian oil firms may cut output if unprofitable

TARKO SALE, Russia (Reuters) – The world is heading toward a sharp deficit of oil production capacity and Russian companies could cut output and exports should they become unprofitable, Russia’s energy minister said on Tuesday.

“Oil companies should decide themselves. If it’s unprofitable, then they could decide to lower production,” Sergei Shamtko told reporters in the northern Yamal-Nenets autonomous region when asked if Russia could join OPEC’s oil output cuts.


Shmatko, speaking to journalists on a trip to a West Siberian oil town to open a gas processing plant, also said he believed the price of oil should be higher than $60 a barrel to suit both consumers and producers.

“Almost all OPEC members… probably with the exception of Saudi Arabia, are seriously unhappy about the current oil price levels… The situation today is that many countries are on the brink of production profitability,” he added.

“And we expect and this is our joint opinion with OPEC that if it continues that way then we will not only face a substantial cut in oil supplies to the world’s markets in the mid-term, but also a drop in production capacities,” he said.

Reuters