Russian oil companies call for state support for oilfield service companies



Russian oil companies have sent proposals to the government to request state support for oil field services companies, given the reduction in production they must undertake due to Russia's commitment to the OPEC + alliance agreement, Tatneft reported today.

"The situation in the industry today hit mainly service companies in oil fields, because producers are forced to reduce investment programs within the framework of restrictions on oil production," said Tuesday the Tatneft deputy general manager Rustam Halimov at a telematics conference on the market.

He explained that, in the case of Tatneft, the company will retain almost 20% of oil production under the OPEC + agreement that will enter into force on May 1 and almost 40% of the production wells stocks, which which will affect development rates.

The Russian oil company can offset the limitation on oil production for almost two years only by launching closed wells, it said, according to the TASS agency.

"This is a very serious blow to our colleagues, our oilfield service contractors," Halimov said.

Tatneft will maintain the "operability" of the wells, he said, while explaining that the company plans to focus its investments now on refining oil in current market conditions, in which the price of oil has plummeted.

The price of a barrel of Brent oil, the benchmark in Europe, is currently trading at around $ 20.

The TASS agency said in turn on Monday that Lukoil, Russia's largest private oil company, will cut production by 300,000 barrels a day as part of the OPEC + deal.

Under this pact, Russia promised to reduce its production by 2.5 million barrels per day (mbd) in May and June.

The alliance countries agreed in April to reduce their production by 9.7 million barrels per day in the same months.

Then, until December 31, the agreed total adjustment will be 7.7 mbd, and from January 2021 to the end of April 2022 the decrease will be 5.8 mbd.

With the sum of other large producers that voluntarily reduce their production, it is calculated that the market will receive a total of about 20 million barrels a day less from May.

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