MOSCOW (Reuters) - Russian Energy Minister Alexander Novak said on Friday coordinated oil production cuts with OPEC to support falling oil prices were unlikely and would be inefficient if they did happen anyway.
Novak’s comments follow a meeting last month of the Organization of the Petroleum Exporting Countries which ended without any agreement on how to prop up prices and after some OPEC members urged Russia to cut its own oil output.
“From our point of view, it is unlikely that all the countries within OPEC can agree on production cuts, let alone those countries which are not in the OPEC coalition,” the RIA news agency quoted Novak as saying in an interview with RBC TV.
“Such consultations have been underway for the past year and a half since oil prices started to fall in mid-2014,” he said. “(But) we see that in 2015 countries like Saudi Arabia in OPEC have increased total production by 1.5 million barrels per day.”
Any coordinated efforts to cut oil output would “not be efficient” anyway, he said, because balance in the market depended mostly on shale oil output in the United States.
Oil prices have fallen by more than 70 percent over the last 18 months, mainly as a result of oversupply. That presents a challenge for Russia, where oil and gas sales account for more than half of its budget revenues.
Russia has in the past brushed off calls for it to cut output by saying its harsh climate would make it hard to quickly restart production once wells had been closed.
Novak said the critical oil price level for domestic oil producers was $5-$15 per barrel, which amounted to the cost of production. He ruled out the oil price falling to a long-tern price of $10 per barrel from around $30 now.
Reporting by Vladimir Soldatkin and Jack Stubbs; Editing by Andrew Osborn