MOSCOW, March 2 (Reuters) - Russia’s Rosneft, the world’s biggest listed oil producer by volumes, is floating the idea of a domestic oil production cut as a tool to balance the global market and as the firm itself is facing a natural decline this year, two industry sources said.
It was not immediately clear if Rosneft’s proposal was that its own output would be reduced, or that production across all Russian energy firms would go down.
If it was just Rosneft’s output alone being reduced, that would be offset by growth in output from other producers. According to Russian Energy Ministry data, Gazprom Neft, Bashneft and Tatneft were showing growth in February.
Russia, Saudi Arabia, Qatar and Venezuela reached a preliminary agreement last month in Doha to freeze oil production for this year at the levels reached in January, in a move to curb surplus supply on the global oil market.
Following a meeting on Tuesday with the heads of Rosneft, Lukoil, Gazprom Neft, Bashneft, Surgutneftegas and others in the Kremlin, Russian President Vladimir Putin said on Wednesday that they agreed to stick to the Doha deal.
Rosneft’s proposals would go further than the freeze already agreed. Two industry sources told Reuters that Rosneft was proposing a cut in production as it will face a natural decline this year in any case.
“This is not something new for the market - everyone has heard this and everyone is discussing this,” a source in a major oil producer said.
Mikhail Leontyev, Rosneft spokesman, said: “Anonymous sources who are leaking confidential information and are inclined to lies and fantasies should not be trusted.”
A third industry source familiar with Rosneft plans said that the company expects its oil production to fall by around 2 percent this year. “If they manage to prevent a deeper fall that would be a good achievement,” the source said.
A fourth industry source confirmed the figure of 2 percent.
Reporting by Olesya Ostakhova, Vladimir Soldatkin, Katya Golubkova and Denis Pinchuk; Editing by Christian Lowe