I don't think there are serious talks about the price war

26 october 2015 | RBC-TV

Alexander Kurdin, the Head of the Department for Strategic Studies in Energy of the Analytical Center, gave comments on the situation in the oil market during the live broadcasting on RBC-TV.

Alexander Kurdin
Alexander Kurdin
Department for Fuel and Energy Sector

On 21st October a technical meeting devoted to the isssues of oil prices of OPEC and other countrieswas held, however due to its non-public character it is impossible to talk about the reached agreements, according to the expert. 'We have the understanding that the price level of about 70-80 dollars per barrel exists, and some members of the cartel are fighting for it. Considering our response, it is evident that Russian companies will not go bust,' said Mr Kurdin. The expert considers Russian companies to be quite competitive and does not expect crucial consequences. At least, statistics of the Russian oil sector shows the growth of production, according to the expert.

On the question of the reporter if there were resources for the increase of the Russian export the expert replied that the significant growth of export was not expected. 'Nowadays the production is 530 million tons of oil, we export a bit more than a half of it (around 280 million tons). In the meanwhile the production is growing but we are close to the topping,' Mr Kurdin considers.

As for the escalation of the price war in the oil market, in Mr Kurdin's opinion, there are fields of high costs, first of all - the Arctic region. For instance, Shell has announced that it leaves Arctic projects on American shelf as with present prices it is too expensive. At some point we also should think about Arctic projects,' said the expert. According to the expert, the deep-water shelf of Brazil is in the risk zone, Canadian oil-bearing sands will also suffer with the price of 40 dollars per barrel, and so will the number of fields in the North Sea. However Mr Kurdin does not see reasons for seriously speaking about the price war. 'In the meanwhile we see that the countries are trying to preserve their share in the oil market, and a constant solution must be found,' he concluded.

According to Mr Kurdin, the natural competition takes place in the world market, therefore the escalation of the theme of the price war is not desirable at the moment because it only makes the expectations of the investor in the field worse.

More detailed information can be found in the program 'Experty. Rynok online.'