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Russia to cut oil output

MOSCOW: Russia’s President Dmitry Medvedev has said Russia will join the Organisation of Petroleum Exporting Countries (OPEC) in reducing oil output to support prices.

“Our partners in the [OPEC] oil club… are asking us to have a coordinated policy. I’d like to say that we are ready for this,” said Mr. Medvedev in the Ural Mountains city of Kurgan.

This is the first time he has promised to join forces with OPEC to halt the plunge in crude prices. Russia is not a member of OPEC, but exports almost as much oil as Saudi Arabia. Together, OPEC and Russia control about half the world’s daily production, or more than 40 million barrels.

The Russian oil mix, Urals, has plunged below $45 a barrel, whereas the 2009 budget is based on the forecast of $70 a barrel. Mr. Medvedev suggested that Russia may go as far as to join OPEC.

“We have to defend ourselves. This - oil and gas - is our revenue base. Protective measures may involve both a reduction in oil production volumes and joining existing organisations of suppliers, as well as participation in new organisations, if we can agree about this,” he said.

His comments came ahead of an OPEC meeting on December 17 in Oran, Algeria, where the oil cartel is expected to drastically reduce output quotas. Russia is taking “its own proposals” to the OPEC meeting aimed at “creating more fair and stable rules of the game in the oil market,” said Russia’s Energy Minister Sergei Shmatko.

Russia is sending a high-powered delegation to Algeria led by Deputy Prime Minister Igor Sechin.

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