Novak: current oil prices do not allow U.S. to significantly increase shale oil production
NAGATO. Dec 15 (Interfax) - Current oil prices at $50-$55 per barrel do not allow the United States to significantly increase shale oil production, Russian Energy Minister Alexander Novak said.
"We don't need to be afraid that shale oil will be a source of competition. Because all countries that produce oil and export oil are ready to participate in the market," Novak told journalists, responding to a question by Interfax on whether there was a risk that US shale oil production would offset the efforts of OPEC.
"Those prices which are today being established will of course somewhat stimulate shale oil production, but not at the volumes which existed during the period of high prices at over one hundred dollars, because the price is still $50-$55 per barrel which is significantly lower. In this sense, we believe that nothing extraordinary will take place, even if shale oil production somewhat increases compared to the period of today's slump," Novak said.
He said that shale oil production in the last two years has fallen by 900,000 barrels. "We understand that demand for oil production will constantly grow in the mid-term in order to cover the demand, including what is required not only for production at ordinary fields, but also for those hard-to-reach fields, both deep sea and shale oil production and so forth," he said.
Novak said that there is no problem in the mid-term in terms of the balance of supply and demand.
At OPEC's November 30 meeting in Vienna, the cartel's member states agreed to cut production by 1.2 million bpd to 32.5 million bpd beginning January 1, 2017 with the understanding that non-OPEC countries would cut production by 558,000 bps, with Russia agreeing to reduce its output by 300,000 bpd. This agreement with non-OPEC countries was reached on December 10.