LUKOIL says Russia could join OPEC, trim output

A vice-president of Russian private oil major LUKOIL said on Wednesday that Russia could join OPEC and that it could take part in production cuts to help prop up global prices.

The comment by Leonid Fedun at a conference in Moscow came as a surprise after Russian officials and even Fedun's boss, LUKOIL Chief Executive Vagit Alekperov, said earlier this month Russia should not join OPEC as it would damage the country's oil industry.

"(Joining OPEC) will be only good for Russia," he said.

"We are seeing that Russia and OPEC are beginning to cooperate. I believe the future of the Russian industry and price stability hinges on close cooperation with OPEC. To the extent of Russia joining OPEC," he said.

He said Russia could afford to cut production and exports by 300,000 to 400,000 barrels per day (bpd) — or around 3 or 4 percent of current Russian production — to help OPEC.

He added that executives from private Russian oil companies could attend OPEC's next December meeting in Algeria.

Russia's growing ties with OPEC have unnerved global consumers already worried by talks between Russia, Iran and Qatar to create an OPEC-style gas group.

Fedun's words came one week after OPEC Secretary General Abdullah al-Badri met Russian President Dmitry Medvedev in unprecedented talks between OPEC and the head of the Russian state.

Senior Russian energy officials said during the meeting that the country would not join the organisation but could become a swing producer to influence global prices and they revived the decade-old idea of an oil reserve — which could be used to support the market.

Badri said he would not ask Russia to cut production and they both said they had "exchanged information".

Fedun went as far as saying he had tax recommendations for the government should it decide to cut production together with OPEC.

He suggested changing the subsoil law to allow production cuts and freeing units that proceed with cuts from property tax.