Posted on 12/15/2008 2:29:30 PM PST by thackney
The Organization of Petroleum Exporting Countries, aiming to exercise greater control over global oil production and pricing, wants Russia to become a member, according to OPEC Pres. Chakib Khalil.
"We always wanted [Russia] to join OPEC," Khalil said, adding that the move would increase the authority and influence of the group, which currently accounts for about 40% of global supply.
Russia is the world's major non-OPEC oil producer, sometimes producing more oil than OPEC member Saudi Arabia, which has a quota within the group of 8.5 million b/d.
Mindful of the potential effect on prices of OPEC-Russia coordination, which would control about 50% of global production, Khelil played up Russian support ahead of the OPEC ministers planned Dec. 17 meeting in Oran.
"We expect concrete support from them," said Khelil, who would not predict whether a formal announcement on Russian membership in the group would take place at the meeting in Oran.
High hopes in Oran However, Khelil noted that Russia's 20-member delegation was headed by the country's deputy prime minister for energy, Igor Setchin. "I hope the importance of their delegation is a measure of the importance of the decision they'll announce," Khelil said.
Regardless of any decision over membership, OPEC still wants substantial Russian cooperation regarding production cuts.
Ahead of the meeting in Oran, OAO Lukoil Pres. Vagit Alekperov said OPEC members, who are unhappy with the current price of oil, expect Russia to cut its oil production by 200,000-300,000 b/d based on planned output for 2009.
Russia's unlikely membership The issue of Russian membership in OPEC arose earlier this year when Deputy Prime Minister Igor Sechin said that his country would coordinate oil production with OPEC (OGJ Online, Oct. 27, 2008).
This stated intent later took the form of a cooperation agreement handed by Russia to OPEC. It is expected to be brought for consideration and approved at the OPEC session this week.
Yet, much though OPEC would like to bring Russian exports under its quota system, cooperation is thought unlikely to extend much beyond coordinating some production cuts, with full-blown membership out of the question.
"We just examined our options and pitched to see how the market would respond," said Alexei Gromov, deputy general director for science at Moscow's Institute for Energy Strategy.
"Joining OPEC would seriously curb our space for maneuver," Gromov said, adding that, "Russia has already taken its own niche in the market and would not want to give it up."
And related news:
Rosneft says ready to cut production if Moscow follows OPEC moves
http://www.platts.com/Oil/News/8239153.xml?sub=Oil&p=Oil/News
Russia’s biggest oil producer, Rosneft, does not expect its oil production to fall next year, but is ready to act in line with the Russian government if it decides to support OPEC over an expected decision to cut output, Peter O’Brien, the company’s vice president, said Monday.
“If there is a decision (by the government) to cut production, of course of we will be constructive,” O’Brien told reporters in Moscow.
He said the company has no plans to cut production in 2009, but added specific targets will be considered at a board meeting later this month.
O’Brien said that the company’s main projects, such as a crude output increase from Yuganskneftegaz, the commissioning of the giant Vankor field in East Siberia, and the construction of new facilities at the Tuapse refinery, remain on track.
Rosneft also plans to negotiate a new bridge loan from Western banks of between $1 billion-$1.5 billion in early 2009 to help refinance its debts, said Sergei Makarov, vice president of finance. The company also plans to negotiate a $4 billion loan from Russian state bank VEB to refinance debt next year, a company source said.
Rosneft has raised a total of $3.3 billion from Russian banks this year to refinance its debts. The company has reduced its debts to $16 billion and is to pay “significantly” less in debt servicing next year, Makarov said.
Rosneft became one of Russia’s most indebted companies last year after it bought a number of assets of bankrupt rival Yukos, with net debt standing at over $30 billion in June 2007.
Sure, Dems, no need for icky drilling in the US. Forget about yucky coal and tar sands. Solar panels and windmills will save us all!
The article said — “Joining OPEC would seriously curb our space for maneuver,” Gromov said, adding that, “Russia has already taken its own niche in the market and would not want to give it up.”
—
That would be exactly what I would think if I were considering that on behalf of Russia. Why would they want to hamstring themselves. They can choose to cut production now if they wish, or not — if it’s not in their own interests...
There’s no incentive for them to join OPEC...
I sense we are being set up for another perfect storm regarding oil prices. As the world’s economies go into recession oil prices drop which puts pressure on OPEC and others to cut production. Additionally, oil companies are cutting their investment on new oil projects (http://www.chron.com/disp/story.mpl/front/6162619.html).
In a year or tow, the world’s economies will begin to recover and oil demand will skyrocket. My bet is that there won’t be enough oil supply at the time we are coming out of the recession and oil prices will skyrocket thus choking off the economic recovery.
Should read:
a year or two
Bingo!
Why should Russia put themselves in a straitjacket,when they can produce as much oil as they want, and profit even as OPEC cuts production (if OPEC members don't cheat on quotas that is)?
Why drill, Obama’s gonna pay my mortgage and fill my gas tank!
Hope and change!
In the end, the bureaucracy party will end up killing itself as government programs create no wealth. The fundamental difference between a Liberal and a Conservative is that Conservatives understand it takes businesses to provide the tax money to pay for Liberal programs. Cannibalizing budgets by people who really never contribute to the base, other than recycled payroll taxes is really a 0 sum game.
In the end, like a ponzi scheme, the final guys in the game figure out they were the suckers and the party ends.
Worthless, make-work government positions that last until death really only serve themselves and are cash drains...in the end, the model needs to be tweaked and responsibility added to fix the problem.
Zero/BO/Soetero is not the answer with his Lefty “take from the entrepreneur” shady Chicago schemes.
We are f’ed.
So puttie boy there, how’s that military rebuilding going?
kgb dick.
OPEC Urges Nations to Join Up or Cut Output
Dow Jones Newswire via Rig Zone | December 02, 2008 | Dow Jones Newswires
Posted on 12/02/2008 1:28:55 PM PST by thackney
http://www.freerepublic.com/focus/f-news/2141680/posts
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