Russia announces cut in oil exports of 150,000 barrels a day

Wednesday, December 5th 2001, 12:00 am
By: News On 6

MOSCOW (AP) _ Russia announced Wednesday that it would reduce oil exports by 150,000 barrels a day beginning Jan. 1, in response to OPEC's calls for production cuts to help stabilize oil prices.

The pledge followed an earlier decision to reduce oil production and exports by 50,000 barrels a day for the rest of the year, a cut criticized as too small to affect prices. The larger cut was likely to go a long away toward satisfying the Organization of the Petroleum Exporting Countries.

Russia is the world's second-largest oil producer at 7 million barrels a day.

The promised cut sent the price of Brent crude up by 50 cents on the International Petroleum Exchange in London, though later in the day it settled back to near its previous $19 a barrel range. The Russian move brought immediate accolades from oil officials in Norway and Kuwait.

Stanislav Naumov, a spokesman for Deputy Prime Minister Viktor Khristenko, said no time limit had been set for the cut, which was agreed on at a meeting between Prime Minister Mikhail Kasyanov and the heads of Russia's oil companies.

``We are counting on the suppliers, who have already made this decision, to fulfill it,'' Kasyanov said, according to the Interfax news agency.

He said the oil companies represented at the meeting _ including Lukoil, Surgutneftegaz, Yukos, Tyumen Oil Co. and Sibneft _ accounted for 95 percent of Russia's oil exports.

Kasyanov said Russia hoped the cut would help achieve a price of $20 to $25 a barrel and was now ``counting on appropriate measures'' from other oil-exporting countries.

Global oil prices have plummeted nearly 30 percent in recent months, and OPEC implored Russia to join other nonmember nations such as Mexico and Norway in making larger cuts to help shore up prices.

OPEC, which produces approximately 40 percent of the world's oil, has cut production by 3.5 million barrels a day so far this year.

The 11-member cartel agreed Nov. 14 to further reduce output by 1.5 million barrels a day as of Jan. 1 on condition that non-OPEC members agree to cuts amounting to 500,000 barrels a day.

Mexico has already promised to cut its production by 100,000 barrels a day, and Norway has agreed to reduce its output by 100,000 to 200,000 barrels a day _ as long as other oil producers do their share.

``The (Russian) cut is positive. It will give us a better basis to make a Norwegian decision. We will wait to decide how much and when the Norwegian cuts will take place,'' Brit Skjelbred, Norway's deputy oil minister, said Wednesday.