Venezuela to discuss Algerian oil accord with Russia

Talks with Russian officials this week could add additional weight to an oil production agreement reached last week in Algeria, Venezuela's president said.

State-owned Petróleos de Venezuela, known also as PDVSA, said through its official Twitter account that President Nicolas Maduro aims to carry a message to Russia about cooperating on production arrangements

"It is very certain that we have an OPEC-non-OPEC agreement," the president was quoted as saying.

Ministers from the Organization of Petroleum Exporting Countries emerged from a closely-watched meeting last week in Algeria to say the 14-member production group, of which Venezuela is a member, could no longer ignore the pressure from the broad gap between supply and demand and how that was impacting the industry and the sovereign economies that hinge on those market dynamics.

Members said they would work toward setting a production target ranging between 32.5 and 33.0 million barrels per day in an effort to pull the market back into balance.

The 14 members of OPEC in August combined to produce about 33.2 million bpd, meaning its cap at best would cut output by around 2 percent, or about 700,000 bpd. Venezuela's oil minister said global crude oil production would need to drop by about 10 percent to put the market in balance.

A midsummer report from the U.S. Energy Information Administration found oil export revenue for OPEC members in 2015 was a collective $404 billion, 46 percent lower than the previous year. EIA said unplanned outages in countries like Libya and Nigeria are adding insult to injury. In Venezuela, further declines are expected because of work stoppages in response to a lack of payment from PDVSA. Most of the OPEC members in the Persian Gulf region are impacted less than their peers, the report found.

Russian Energy Minister Alexander Novak helped coordinate early 2016 proposals for a production freeze following February meetings with his counterparts from Qatar, Saudi Arabia and Venezuela.

The Central Bank of Venezuela has blamed the collapse in oil prices for a drop in gross domestic product. Speaking from Tehran in early 2016, Venezuelan Oil Minister Eulogio Del Pino said oil could drop to historic lows without some sort of coordinated action from producers.

Venezuela's oil ministry issued a joint statement with Iran this week praising the Algerian accord. Iran, for its part, said this week the production cap depended in part on non-OPEC efforts as the Islamic republic looks to regain a market share lost to sanctions.