Vladimir Putin admitted that the situation on the world energy market is worse than ever in recent history. “This has not happened, it’s true!” bitterly confirmed by the President, noting that he was forced to accept the alarmist statements oilmen. The demand for oil and gas in the world has fallen to the 1995 level. However, energy Minister Alexander Novak said that he sees “green shoots” coronavirus on the scorched earth.
a meeting on the development of energy passed under the same scenario as the meeting of the President with the bankers. Public were only the speeches of the officials. And complaints and requests oilmen sounded closed to the press.
first, after the transaction OPEC + has accumulated a lot of painful questions about how it will be allocated quotas for production cuts. Secondly, requests for support from the oil companies always hurtful to society and become the objects of criticism in the media.
Vladimir Putin in the beginning of the meeting said that the global and Russian power industry faced serious turmoil. Under the pressure of the coronavirus worldwide decreased energy demand, and after it went down and price quotes.
of Course, market fluctuations have been observed before. “But this has not happened, it’s true! – confirmed GDP. And, citing the oilmen, almost by syllables repeated: “This has not happened”. To mitigate the negative trends, according to the President, the joint efforts, including transaction OPEC +.
“We will continue to build an effective cooperation with foreign partners and to reach agreements on the balancing energy market”, – he promised. As suggested by many experts, such arrangements may be needed in the near future, as the agreed reduction of 9.7 million barrels per day may not be enough: too much in the world has accumulated useless oil.
energy Minister Alexander Novak believes that the market is already close to peak demand reduction. Today it is minus 25-30 million barrels per day, which means a rollback of 25 years ago – to the level of 1995. This has resulted in the decline of mobility, stop enterprises, the lifting of the air and other elements coronavirus reality.
the Situation, according to the Minister, difficult, but not critical. Moreover – already seen the “green shoots”: the Novak took the statements of the European countries the gradual easing of restrictive measures and the reduction of production in the framework of the deal, OPEC +, which will begin in may.
“the Imbalance in the second half of may should decrease. And there is also an optimistic assessment about the improvement of the situation on the world oil markets since the second half of the year” – encouraged by Putin’s Minister. For ROSthese “correction” of energy prices is critical: the FEC generates 40% of the Federal budget, much of which is now being spent on fighting the coronavirus, and minimising the impact of the pandemic.
Russia may cut oil production by 19% compared to Feb. For the year the reduction will be 10%. And here a problem arises for the oilfield services segment, which will lose 30-40% of orders. To support the oil workers, according to Novak, developed innovative approaches. Wells will not be closed – on the contrary. “We believe that we need to create conditions for continued drilling even when it’s not necessary,” said the Minister, noting that this is necessary to provide financing.
the Energy sector also need preferential credit resources to cover cash gaps arising from non-payment of utility bills. In General, the level of payments for electricity decreased by 12%, heat 20%.
However, in the residential segment performance is worse: the resource providers compared to the same period last year were missing almost 40% of revenues. “Unfortunately, budgetary organizations reduced pay by about 10%”, – said Novak, noting that the low payment discipline could complicate preparations for the next heating season. The government, as you know, until the end of the year canceled penalties and interest for the Russians for non-payment of the utilities bills and prohibited to turn off the utilities for the debts. However, resource providers make this period has been reduced: the moratorium is proposed to restrict the first day after the end of the regime of non-working days. But the question is if and discussed at a meeting with Putin, it is already closed.
Also, the brackets were and pricing in the gasoline market.
Experts and politicians (in particular, “Fair Russia”) suggest to the authorities temporarily to change the taxation system in the oil industry that the price of Russian gas stations corresponded to oil quotations. (Now they don’t fall behind them, maybe the state, using the mechanism of the damper, takes the oil a substantial portion of the proceeds received from the sale of fuel on the domestic market). In a crisis, the refusal of the damper or the revision of parameters could support people, faced with shrinking revenues. But Novak, this issue was not raised. He just stated that in Russia there is a falling demand for gasoline – 40% to 50%, diesel fuel – by 30%, and jet fuel more than 50%
Read the “Oil drenched everything: the stores were crazy as hell”
