Rosneft wants compensation for OPEC+ production cuts

Rosneft wants state support for the Priobskoye oil field as compensation for losses caused by the oil production cuts agreed with OPEC, Kommersant Daily writes. The company argues that it had to cut output plans by 22mn tons since 2017, which led to a delay in developing new deposits, while oil prices did not increase due to the increase of US shale oil production. The compensation that Rosneft wants for the Priobskoye field is RUB46bn per year for 10 years. Unsurprisingly, the FinMin has opposed the demands. FinMin Siluanov described the demands as “not completely fair”, pointing that oil prices would have probably fallen toward USD40 without the OPEC agreement. An additional problem for the FinMin will be that other companies will also join if Rosneft received such compensation. We remind that the latest instruction of President Putin was to suspend all new tax exemptions for the oil sector till the end of the year and use this time for establishing common criteria for state support and for a comprehensive review of the competing projects. Yet, support for Rosneft’s Priobskoye field was explicitly excluded from this scheme and should be decided on the basis of a separate report.

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