Oil producers will not shut down any facilities where they would be unable to relaunch operations, Russian Energy Minister Alexander Novak said, as the OPEC and non-cartel oil producers continued talks on historic output cuts.
Speaking to the Russia-1 news channel on Saturday, the chief energy official said that he believes the oil companies themselves “will not let that happen.”
Novak was addressing earlier fears that, in order to comply with massive OPEC cuts to boost the tumbling oil market, Russia will have to stop operations at low-production oil wells. Some analysts earlier told TASS that many such facilities hail from the Soviet era and it would be impossible to relaunch them, meaning the country could bury some of its oil reserves there.
The members of the Organization of the Petroleum Exporting Countries (OPEC) and allied major oil exporters led by Russia agreed to historic daily cuts of 10 million barrels on Thursday. The deal has not yet been sealed due to a disagreement with Mexico, which refused to lower its production as much as the oil alliance wanted it to, but announced that it will cut production by 100,000 barrels per day, while the US will take responsibility for an additional 250,000 barrel cuts.
“The United States will help Mexico along and they’ll reimburse us sometime at a later date,” US President Donald Trump said.
The major oil talks are set to continue on Saturday. If the deal is reached in its initial form, the OPEC+ nations will cut their output by 10 million barrels per day starting in May. In two months’ time, the reduction will drop to eight million barrels a day until 31 December 2020, followed by an adjustment of six million barrels per day from 1 January 2021 to 30 April 2022.
In addition to OPEC+ efforts to boost oil prices, producers outside the group are expected to slash supply by at least five million more, Novak said on Friday.
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