Vasiliy Tarasyuk: 2017 will challenge the decisions taken by the oil producing countries
Moscow. 2017 will challenge the decisions taken by the oil producing countries. It is the opinion of Vasiliy Tarasyuk, First Deputy Head of the Committee on Natural Resources, Property and Land, that he shared with the Oil and Gas Information Agency, while summarizing the year results.
“One of the key decisions taken in the end of 2016 was the OPEC’s decision to cut oil production for the first time since 2008. The global oil industry had been working for it during the whole year. There had been multiple meetings and negotiations between the organization’s members and the other leading oil producing countries. The year in general was hard. In the beginning of 2016 the oil prices were at their lowest for the last two years: Brent cost around $30 for a barrel. This led to cutting costs and investment and finally to the OPEC’s decision”, explained Mr. Tarasyuk. “According to Russian Energy Ministry estimations voiced in the middle of the year, freezing the production level could facilitate establishing balance on the oil market for 3-6 months. Now, in 2017 this forecast can be checked”, thinks the expert.
He also said that the policy of the newly elected US President Donald Trump would have a huge effect on the oil industry. His support of shale oil development campaign, lifting the ban on its production may make the OPEC’s decisions fail to reach the desired effect. Another important event is the sale of 19.5% Rosneft’s shares to Qatar Investment Authority and the commodity trader Glencore, despite of all the pessimistic forecasts. The Federal budget will get over 710.8 billion Rubles, which will significantly help Russian economy. Besides, this deal will make Russian oil industry more attractive in terms of investment, believes Vasiliy Tarasyuk.
The expert also commented on the reduction of investment into exploration in 2017. He mentioned that the reduction of exploration operations is provided for by the RF budget and is done consistently. Note that the budgetary allocations on “the Use and Replacement of Natural Reserves” program in 2013 amounted to 63,180,768.9 mln Rubles. The money allocated to the same purpose in 2017 and for the planned period of 2018 è 2019 will amount to the following: in 2017 – 50,207.8 mln Rubles, in 2018 – 48,860.6 mln Rubles, in 2019 – 47,472.2 mln Rubles. So, by 2019 the program’s financing will have reduced by over 15 billion Rubles.
“In terms of hydrocarbon reserves in place Russia takes an important place in the world. Though, with all the good statistical data, the real situation with the recourse base is worrying. We can’t do without investment into exploration. Geology as a branch of industry should support the safety of Russian Federation in terms of reserves, energy and economics, should support its geopolitical interests, including its interests in the Global Ocean, Arctic, Antarctic and Russian offshore”, concluded the expert.