The head of the Ministry of energy of Russia Alexander Novak

© Vladimir Smirnov/TASS

HOUSTON, March 7. /TASS/. Russia considers joining OPEC, but believes that the need to develop cooperation. This was stated by Russian energy Minister Alexander Novak in the framework of the forum CERAWeek in Houston.

“Today, we, frankly, do not consider the option of Russia joining OPEC, but our interaction with the countries – exporters of oil demonstrated the necessity and expediency”, – said the Minister.

According to him, cooperation with OPEC is needed. The lack of interaction with OPEC in the global industry in recent years has sustained a loss of about $500 billion of investment, said Novak.

Novak also said that he discussed with the Minister of energy, industry and mineral resources of Saudi Arabia Khaled bin Abdel Aziz al-Faleh the implementation of the agreement on reduction of oil production. The two Ministers evaluated it positively .

In addition, we discussed the possibility of participation of investments of Saudi Arabia in Russian projects. The volume of investments Novak did not call.

Russia and Saudi Arabia, a member of OPEC, the largest exporters of oil.

At the end of 2016 OPEC countries and States that are not in the oil cartel, entered into an agreement to reduce oil production for six months. The total reduction in the first half of 2017 will be 1.7-1.8 million barrels per day. Including Russia will reduce daily production by 300 thousand barrels.

US sanctions

Novak said that the Russian oil and gas sector overcame US sanctions for the last two years, oil production in Russia grew by 400 thousand barrels.

“Despite the sanctions that were imposed on some of our companies, our oil and gas industry not only met the difficulty, but even showed positive results. In two years, oil production in Russia grew by 400 thousand barrels,” – said the Minister.

See also

Russia and Saudi Arabia discussed the implementation of the agreement to reduce oil production

OPEC: Russian agreement to reduce production by 70-80% will bring results

Russia in February reduced the volume of oil production by 1.6%

Russia cut oil production in February more than 117 thousand barrels per day

The Minister of oil of Iran: oil over $55 a barrel is not in the interests of OPEC

He stressed that the debt load of Russian oil and gas companies are low, like loans, and debt to EBITDA ratio is less than 1.

“Our company has not only managed to increase production, but also improve the efficiency, reduce the cost of production, which averages from $10 to $15 per barrel”, – said Novak.

He also noted that the yield of Russian oil and gas projects is one of the highest in the world, and about 25% of the total production in Russia are the foreign investors. In addition, the Ministry of energy sees great interest from American companies to invest in Russia.

“We are open to foreign companies involved in projects on the territory of the Russian Federation”, – said Novak.

According to Novak, Russia is provided with hydrocarbons at least 50 years, and the hydrocarbon era will last at least another few decades.

“We have oil and gas reserves, which will last more than 50 years, and this is only proven reserves. Huge potential still on the shelf in the Arctic, there are also other projects that will be implemented,” – said the Minister.

According to him, the share of hydrocarbons will fall slightly – from 80% to 75%.

“Of course, scientific and technological progress, improving energy efficiency, reducing energy consumption, the emergence of renewable energy and other modern technologies that will significantly influence the change in the energy balance. However, I am a proponent of the view that the era of hydrocarbons in the coming decades will continue. According to our estimates, the share of hydrocarbons will fall slightly – from 80% to 75%”, – he said.

According to Novak, the change will occur, but will be of a revolutionary and evolutionary in nature. The gas will remain the most promising form of hydrocarbons.

Earlier, Nowak predicted that by 2024, the power of objects based on renewable energy may be about 3% of the current installed capacity and the growth of demand for hydrocarbons in the world will continue at least until 2040.

15% of the market

Novak said that Russia is about 15% of the market of liquefied natural gas (LNG) by 2040.

“The strategy we envisage eightfold increase Russian LNG production until 2040. If today the share of Russia in the LNG market is around 5%, we planned to reach the level of 15%,” – said the Minister.

According to estimates Novak, global gas consumption will grow by 2 trillion cubic metres “If the gas consumption is about 3.5 trillion cubic meters, then by 2040 it will rise to 5.5 trillion cubic meters of gas. Accordingly, these volumes need to produce, to invest,” – said the Minister.

Earlier, Nowak has approved the forecast of scientific and technological development of industries of fuel and energy complex of Russia. According to this document, the market share of natural gas in the total volume of global flows of fossil fuel resources by 2040 will rise to 22-25% (2012 – 17%). The LNG trade will provide nearly 60% of this growth, outstripping rate of the pipeline gas trade.

The gas issue in Ukraine

The Minister said that the energy Ministry has warned the European Commission about the lack of volume of gas in underground storages (UGS) of Ukraine.

“I expressed concern because winter is not over, a little gas”, – he said.

See also related news:

The gas conflict of Russia and Ukraine


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“Gazprom” offers Naftogaz to ensure gas supplies letter

Novak spoke about a possible increase in the price of gas for Ukraine in the first quarter

“Naftogaz” accused “Gazprom” in the pressure reduction of gas transit on the border with Russia

Earlier in interview to RBC TV channel, the Minister said that the energy Ministry of Russia estimates the volume of gas in UGS Ukraine at the level of 8.4 billion cubic meters, and fears that it may not be enough to pass the winter.

Ukraine stopped buying gas from Russia at the end of 2015 in 2016, did not use Russian gas in preparation for the heating season by purchasing gas on the reverse in Europe. The current heating season Ukraine has started with the gas reserves of 14.7 billion cubic meters when filling UGS 48%.

In turn, the “Ukrtransgaz” (the operator of the gas transportation system) argued that the reserves of gas in storage is sufficient for the heating season 2016/2017 year, and with a strong cold there is a technical possibility of additional imports.

Assessment of national energy security Fund, buffer gas (minimum balance to ensure the lift gas in the required volumes) in the Ukrainian storage facilities should reach 6-7 billion cubic meters.

In the winter, Ukraine uses gas in underground storage in the West country for transit of Russian gas to Europe. Thus, nedostatochnosti UGS creates risks for transit of raw material through the territory of the country.