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Russia preparing calculations to exclude condensate from OPEC+ quota; no decision yet

Russia preparing calculations to exclude condensate from OPEC+ quota; no decision yet

Moscow, Dezember 3 - Neftegaz.RU. Russian energy minister Alexander Novak said Russia is preparing calculations to exclude condensate from its OPEC+ quota, but has so far yet to take a decision, Platts reported.

"We have not taken a decision yet, we're discussing it, we are making calculations and based on those we will draw some conclusions," Novak told reporters, ahead of a meeting with representatives of Russian oil producers.

Last week Novak said that new volumes of condensate should be excluded from Russia's quota. He said Russian condensate output would increase as new gas production came on stream, and as it is not exported, it should not be included in the deal.

Under the current OPEC+ agreement, Russia committed to cut around 230,000 b/d from its October 2018 crude and condensate output of 11.42 million b/d. Compliance has fluctuated significantly this year, with Russia over-complying for a few months in the summer due to the Druzhba pipeline contamination. Since August it has failed to comply, however. Novak said last week that producers are planning to comply in November.

Novak has yet to indicate what Russia's position will be on the producer group's next steps. Vladimir Putin indicated that Russia wanted to continue to work with OPEC on market stabilization and saw ensuring predictability of the market as a key priority.

Russian producers have so far split the cut quota proportionally among themselves, but have intermittently expressed concerns about the impact of complying with the deal on their longer-term development plans and market share. It is unclear how excluding condensate from the quota would affect the division of the cut among Russian producers.

When leaving the meeting Ravil Maganov, 1st executive vice president of Lukoil, said: "We proposed to stay in the deal with the same quotas, and at the end of the 1st quarter meet and discuss."

"I think that there is no sense in extending [the deal] now. We need to see. The market is still unstable, so we need to look at it until April and then decide," Maganov said ahead of the talks.

Gazprom Neft CEO Alexander Dyukov added that they planned to discuss the internal market and that he expected prices to remain "stable."

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