Russia's cost-effective oil output is 350m tons annually

With the existing export capacities and the oil price of $17 per ton of Urals, Russia's cost-effective output is 300-350m tons of oil a year, YUKOS CEO Mikhail Khodorkovsky said at a press conference dedicated to signing a declaration of intentions to construct the Murmansk oil pipeline. The YUKOS chief was quoted as saying the current export directions are a bit too costly, in particular, oil transportation costs have grown 500 percent over the past five years.

Khodorkovsky argues that so far as companies have money and time to build additional export capacities, it is necessary to construct an effective pipeline that will allow for the production of 450m tons of oil a year, which is earmarked in Russia's energy strategy until 2020. The oil company CEO also believes that after the feasibility study of the new pipeline is prepared, oil output may be boosted in Russia. So far oil companies are adjusting their oil output to the preliminary feasibility study, Khodorkovsky pointed out.