Russia may cut oil production to check falling prices

November 25th, 2008 - 5:53 pm ICT by IANS  

New Delhi, Nov 25 (IANS) Russia does not rule out reducing production of oil as a reaction to the continuous fall in international crude prices. “We cannot rule out the cutting down of oil production,” Russian Energy Minister Sergey Shmatko told reporters here Tuesday.

He said the Organisation of the Petroleum Countries (OPEC) is currently discussing measures to prop the oil market by reducing production. “Russia will be actively co-operating (with OPEC) to defend its interest. We are trying to understand the process involved,” he added.

“Russia is now on the threshold of a new stage of development in oil and gas and we are looking at billions of dollars of investment in remote areas. The price of oil and hydrocarbon resources should justify these investments.”

Shmatko indicated that the ideal price band should be between $70-$90 a barrel, saying, “The budgets of many oil-producing countries have been based on the oil price band of $70 to $90 per barrel.”

The Russian minister said 2009 would be a difficult year, especially with the global financial crisis, and that oil companies will likely reduce investment budgets next year.

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