Russia, Venezuela to Discuss Potential Steps to Stabilize Oil Prices
August 31 2015 - 01:40PM
Dow Jones News
MOSCOW—Russian President Vladimir Putin will discuss "possible
mutual steps" to stabilize the global price for oil at a meeting
with Venezuelan President Nicolá s Maduro in China on Thursday, a
Kremlin aide said, as both countries grapple with lower prices for
their main export.
Venezuela, a Russian ally that has been hit hard by plunging oil
prices, has been pushing for an emergency meeting with the
Organization of the Petroleum Exporting Countries in coordination
with Russia to work out a strategy to halt the recent retreat in
prices, people familiar with the matter said.
The Kremlin aide, Yuri Ushakov, didn't expand on what potential
steps could be taken but said they could be "within the context of
Russia's cooperation with OPEC."
Russia also has been hurt by lower crude prices, as oil and gas
account for half of federal budget revenue. But officials have
repeatedly said that Russia, which vies with Saudi Arabia for the
position of top global oil producer, won't cut output to prop up
prices. Russia's economy is in recession, but authorities have
cushioned the effect of lower prices by allowing the ruble to
weaken, protecting budget revenue even as the dollar price of oil
has halved in the past year.
The currency weakness is also shielding Russian oil companies'
ruble profits and helped them maintain production as they receive
most export income in dollars while much of their expenditure is in
rubles. Russian state-controlled oil giant OAO Rosneft, the world's
largest listed crude producer, said its profit in the second
quarter fell 22% compared with the same period for last year to 134
billion rubles ($2.05 billion). Other Russian oil companies such as
OAO Gazprom Neft, the oil arm of state gas firm PAO Gazprom, and
OAO Bashneft increased ruble profits in the second quarter as their
production soared. The country's second-largest producer, OAO
Lukoil, which reports in dollars, said last week revenue was down
more than half in the second quarter at $1 billion.
Rosneft said Monday that it pumped 2% more hydrocarbons in the
first half of the year compared with last year. Lukoil, which has
long battled production declines at its main fields in Western
Siberia, said last week that its output in Russia inched
upward.
The global oil glut that has pushed crude prices down further in
recent weeks has led Venezuela to reach out to some members of
OPEC, including Qatar's oil minister and president of the OPEC
conference, Mohammed al-Sada, to try again to find common ground to
defend prices, according to the people familiar with the
matter.
OPEC doesn't meet until Dec. 4 and has rebuffed previous calls
for an emergency meeting.
OPEC officials from the cartel's power center—Persian Gulf
countries such as Saudi Arabia, Kuwait and the United Arab
Emirates—say privately that having an emergency meeting is
pointless especially when producers outside the group, such as
Russia, aren't willing to cut.
Oil prices have plunged to six-year lows in recent months, but
they turned higher Monday on reports that oil-producing nations
might be willing to agree to output cuts to shrink the global glut
of crude.
Russian and Venezuelan officials are among the delegates from 30
nations in China this week to celebrate the defeat of invading
Japanese forces 70 years ago.
Write to James Marson at james.marson@wsj.com and Summer Said at
summer.said@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
August 31, 2015 13:25 ET (17:25 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
Citigroup (NYSE:C)
Historical Stock Chart
From Feb 2024 to Mar 2024
Citigroup (NYSE:C)
Historical Stock Chart
From Mar 2023 to Mar 2024