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Russia focuses on cuts in oil output, not exports in Q2
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Russia to reduce oil output to 9 mln bpd in June - JPM
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Government orders firms to cut oil output to meet OPEC+
target
(Adds detail, quotes in paragraphs 8 and 9)
By Olesya Astakhova
MOSCOW, March 29 (Reuters) - Russia has decided to focus
on reducing oil output rather than exports in the second quarter
in order to evenly spread production cuts with other OPEC+
member countries, Deputy Prime Minister Alexander Novak said on
Friday.
Earlier this month, Russia said it would cut its oil output
and exports by an additional 471,000 barrels per day (bpd) in
the second quarter in coordination with some OPEC+ participating
countries.
Novak also told reporters that Russian oil companies will
reduce production in proportion to their share of the country's
total oil output.
Russia plans to gradually ease export cuts: in April, it
will reduce output by an extra 350,000 bpd, with exports cut by
121,000 bpd. In May, the extra output cut will be 400,000 bpd
and exports cut by 71,000 bpd. In June, all the additional cuts
will be from oil output.
The world's second-largest global oil exporter has been
cutting crude oil and fuel exports by a combined 500,000 bpd in
the first quarter, in addition to its previous pledge to curtail
production alongside other members of the OPEC+ grouping.
Russia's move to reduce more oil production, not
exports, was an unexpected move.
JP Morgan, which earlier this month called it a
surprising shift in strategy, said if Russia delivered on the
promised cuts, the country's production of crude oil should
decline to 9 million barrels per day (bpd) by June, matching
Saudi Arabia's output.
Russia currently produces around 9.5 million bpd of
crude oil.
"This is a measure (deepening of production cuts) is
taken so that all the countries contribute equally (to
production cuts under the OPEC+ deal)," Novak said.
"As you remember, we did not reduce (production) by the
volume, by the percentage that other countries reduced. We had a
reduction in exports. The moment has come when, instead of
exports, we are reducing production," he added.
Industry sources told Reuters on Monday that Russia's
government has
ordered companies
to reduce oil output in the second quarter to ensure they
meet a production target of 9 million bpd by the end of June in
line with its pledges to OPEC+.