Oil workers on a meeting with Putin supported the freezing of oil – RBC

Russian President Vladimir Putin at a meeting in the Kremlin with the heads of Russia’s major oil companies

Photo: Alexei Nikolsky / TASS

The heads of oil companies supported the preliminary agreement with OPEC agreeing to freeze at the level of January 2016 oil production . These are the preliminary results of the meeting of the heads of oil companies with Putin

The leaders of eight major oil and gas companies asked the President of Russia to maintain a stable effective tax system for the industry, and also agreed with the idea of ​​freezing oil production at the level of January 2016 to comply with the agreements with the countries OPEC in order to maintain a high level of oil prices. These are the preliminary results of the head of state meeting with the leaders of the eight major oil and gas companies, which took place in the Kremlin today.

According to RBC correspondent, the meeting was held in the hall of the Kremlin’s Security Council meeting, where the most important and private talks the head of state. At the end of the meeting, which began later claimed on schedule time, the journalists left the head of the Ministry of Energy Alexander Novak, who emphasized that the President listened to the requests of oil companies not to raise taxes on the industry, but the issue will first be discussed in the government, and then back to the head level state. According to Minister of Energy, the company promised to comply with its previously agreed business plans for 2016, if there is no new innovations in taxation. “The most important thing in such a volatile situation on oil prices, their unpredictability – is to maintain in the medium term of the tax system that has evolved,” – said the Minister. He said that no decision on taxes at the meeting has been taken, the President listened to the opinion of oil.

Novak also said that the meeting discussed the prospects of the industry for 2016 and the overall situation in the market. “The situation is quite complicated, there is a surplus of oil on the market, for the half year prices have fallen three times. Despite this, Russian companies have confirmed their plans for the development of deposits in 2016, it is very important “, – the minister said to journalists

According to Novak, oil companies supported the idea of ​​freezing the level of oil production at the level of January 2016.. “The companies have confirmed their support for this initiative,” – said the Minister. In his opinion, this is a positive signal for the market, which will reduce the volatility. However, the final agreement with the OPEC partners to freeze prices yet. “We agreed to monitor the situation, continue to [negotiate] with colleagues from other countries”, – explained Novak. According to him, now more than 15 countries – oil producers confirmed their readiness to to freeze production at the January values. But this agreement has yet to be fixed at the level of heads of the ministries of Energy – participants of the negotiations. Freeze format is not specified, the new talks with fellow OPEC and other market participants, according to the minister, is scheduled for March. The most important issue is the problem of monitoring how exporting countries will abide by these agreements, Novak stressed.

The fact that Russian oil companies agreed to freeze production at the January level, Putin said, anticipating a meeting with oil companies. “On this [freezing oil production] he [Russian Energy Minister Alexander Novak] agrees and almost reached an agreement with its partners in the global market”, – said the head of state. “And as the minister reported, all of you agree with this proposal. Some have even more radical proposals “, – he added, referring to the meeting

According to one of the sources close to the meeting, voiced radical ideas on the oil price adjustment -. The proposal to reduce the production and reallocate quotas on exports, but they were not supported.

Oilers, anticipating the meeting, feared that they will be obliged to cut production or export of oil, to which they were not ready. These solutions result in loss of market share and lack of return on investment, explained RBC interlocutors in companies whose executives have been invited to the meeting. They also fear that the industry will face a new increase in the tax burden. Novak after the meeting assured that the heads of oil companies have listened carefully, taking into account the needs of industry. “It seemed to me that the president, of course, heard the opinion of the companies, that a stable tax system, of course, an important factor for the industry”, – he concluded.