Russia to set up working group to monitor terms of production agreement with meetings set tentatively for twice a month. File Photo by Calin Tatu/Shutterstock
MOSCOW, Dec. 16 (UPI) -- A handful of Russian oil companies are expected to form a working group to monitor coordination with production agreements, the Russian oil minister said.
Russian Oil Minister Alexander Novak said representatives from 12 oil companies in the country agreed to work together to monitor the terms of an agreement to cut oil production during the first half of next year.
"All the companies are ready to cut production," he was quoted by Russian news agency Tass as saying.
Members of the Organization of Petroleum Exporting Countries and other top producers agreed in late November to cut production by around 1.2 million barrels per day starting in January. That's about what OPEC expects in terms of demand growth and the deal is aimed at erasing some of the supply-side pressures that pulled oil prices below $30 per barrel in early 2016.
Russia agreed to contribute to the deal and Tass reported that production would decline by about 300,000 bpd in the first half of the year. According to the November document from OPEC, the agreement was "reached following extensive consultations and understanding reached with key non-OPEC countries, including the Russian Federation that they contribute by a reduction of 600,000 bpd."
The latest market report from OPEC finds Russian crude oil production growth is expected to show up in full-year 2016 figures. OPEC said it expects Russia to produce an average 11.1 million bpd next year, against the estimated 11.05 million bpd for 2016.
Russia's stance on the OPEC deal has been fluid. Vagit Alekperov, the head of Russian oil company Lukoil, said recently that "only recommendations" have been made on production. Before the OPEC deal was reached, Russian President Vladimir Putin said the country was ready to "freeze production" at current levels.
Novak said the members of the working group, which included all of the nation's oil companies, would meet twice a month to ensure compliance. The cut would be weighted on what each company produces and Novak said the "terms are equal for everyone."