RUSSIA UNVEILS RESCUE PLAN FOR OIL SECTOR

SOURCE: MEDIA.GAZPROM-NEFT.COM

27 May 2020

RUSSIA UNVEILS RESCUE PLAN FOR OIL SECTOR

Russia is dependent on trading hydrocarbons, while the overall condition of the country’s oil sector serves a pivotal role in its entire economy. It has always been favored by the state. Certainly this seems apparent as the world has plunged into a deep crisis. Added to that is a mere fact that Russia’s energy majors are all in the hands of Vladimir Putin’s close allies.

Russia’s President Vladimir Putin has tasked the government with coming up with a plan to support the country’s oil industry while the output is slashed under an OPEC+ agreement. These measures include a prescription not to sanction companies that stray outside their production quotas and a temporary lifting of penalties for state oil companies for not adhering to their 2020/2021 investment plans. The document also lists special rates that pipeline operator Transneft and Russian Railways will charge for transporting crude and petroleum products while the OPEC+ agreement is in effect A rescue plan for the oil industry came just after an April 29 meeting between Vladimir Putin and heads of energy companies as well as officials overseeing the oil sector. Mikhail Mishustin, the Russian prime minister, is accountable for the smooth implementation of the plan.

As part of the OPEC+ deal that has been in force since early May, countries pledged to decrease its production by 9.7 million barrels