Investing.com -- Energy supplier Gazprom Neft (MCX:GAZP) said it is planning an increase in the production of oil next year, and noted that it and rival petroleum producers in Russia are being granted complete discretion by the government in Moscow as to how to comply with the OPEC agreement, reached earlier this month, to reduce overall output.
Gazprom Neft in a statement to the Russian media said the company expects the 2016 results to reveal an 8% to 9% year-on-year production growth, up from 2015 totals, with the projected output to rise from 79.7 million tons to 86-87 million tons.
Overall oil production by the company is "forecast to grow," moreover, in 2017, the company said
The CEO of Gazprom Neft, Alexander Dukov said Russian oil producers will work out an agreement on specific reduction quotas with one another to meet the goals of the pact with OPEC.
“There are always options of making deals between the companies. The most important thing, is that the total output of Russia gets reduced by 300 thousand barrels a day, but we can sort the reduction scheme out between ourselves," Dukov said.
Other Russian oil companies are making similar statements.
Ravil Maganov, vice-president of Lukoil, said no set quota on an output reduction per producer has been established yet in Russia.
“Each company will have to decide for itself in accordance with its share on the market. The companies shall curtail their output taking into consideration their specific position on the market,” Maganov said in a statment to the press, a copy of which was obtained by Investing.com.
As agreed at the non-OPEC producers meeting on December 10, Russia plans to "cut the daily output" of oil by 200,000 barrels per day in March, raising the cut to 300,000 bpd in April, 2017, with the ultimate production figure not to exceed 10.947 million barrels per day, the government said.
But, the Russian Ministry of Energy is still sticking with its previous forecast on production growth to reach 548 – 551 million tons (or 11.01 -11.07 million barrels per day) in 2017.
Companies will not be compelled to reduce output, and there is "no penalty" for not meeting the OPEC production target, the energy ministry said.
Global oil prices and futures were up this morning in anticipation of the Jan. 1, 2017 start date of the OPEC and non-OPEC production cuts.