Lukoil CEO Expects OPEC+ to Raise Oil Output


June 3, 2021
Lukoil's Caspian Sea Platform (File Photo; Lukoil)

Lukoil's Caspian Sea Platform (File Photo; Lukoil)

Vagit Alekperov, the head of Russia's second-largest oil company Lukoil, said on Thursday that he expects the group of leading oil producers, known as OPEC+, will decide to raise output at its meeting next month.

In an interview with Reuters, he said that the current OPEC+ deal on oil output curbs should be extended once it expires next April.

OPEC+ will meet on July 1 to decide on production levels from August.

"The OPEC+ deal should be extended, it helps to forecast the (oil) price. The participants may take a decision on a small output increase of no more than 500,000 barrels per day (bpd) at the next meeting," Alekperov said.

OPEC+ on Tuesday rubber-stamped an earlier decision to go ahead with production increases over the next two months. read more

Under their existing plan, the Organization of the Petroleum Exporting Countries and allies led by Russia will add 700,000 bpd in June and 840,000 bpd in July.

Alekperov said Lukoil plans to increase its capital expenditure to between 600 billion and 650 billion roubles next year as it embarks on new projects such as production in the Caspian Sea.

Spending is seen at up to 490 billion roubles this year excluding the West Qurna 2 project in Iraq.

Alekperov said Lukoil also plans to start production at Block 10 in Iraq in the end of 2022 or in 2023 with output at 30,000 bpd.

He also said the company plans to sign a deal with Kazakhstan on exploration at the Al Farabi offshore project on Thursday.

He said Russian oil producers has decided not to proceed with unfinished oil wells fund and that the company will increase drilling volumes starting from the second half of the year as the pandemic is easing and oil demand is on the rise.

To ensure Russia has not lost market share after a global production cut agreement finishes in 2022, Moscow had worked out a programme for unfinished oil wells which could start operating once the deal expires.

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