Russia

LUKoil’s production to have no losses even with oil price of $25 per barrel

imageOil production for LUKoil will have no losses even with the oil price of $25.00 per barrel, said LUKoil Vice President Leonid Fedun.
He added this is owing to the Russian fiscal system, which envisages lower taxes with low oil prices.
Fedun also added that sensitivity of LUKoil and other oil companies to a serious reduction of world oil prices is “not very high, because of flexible Russian ruble rate.” However, it is very destructive for majority marginal projects. “The oil price hedging will be $60.00 per barrel and even lower, which is destructive for majority marginal projects,” said Vice President and reminded that last year hedging price was $90.00 per barrel with the oil price above $100 per barrel.
LUKoil top manager said if oil price stays the same or lower within 7-8 months, then 6 million barrels a day will leave the market.