'Russian oil exports are almost at their limit,' said Alexander Arbatov, a member of the board of the International Fuel and Energy Association, and deputy chairman of the Council for Studying Production Capacity of the Russian Ministry for Economic Development, live on air today on Echo of Moscow radio. Commenting on OPEC's decision to increase quotas for oil production by 1.5-2 million barrels per day, Arbatov said that Russia has not yet determined her position on this matter. 'In any case,' he said, 'we cannot play a decisive role on this issue.'
Arbatov explained that in Russia the notion that 'oil exports are at their limit' means that oil extraction rates are practically at their limit. In 2002, oil extraction in Russia increased by 9.1%, and exports by 8%. 'Domestic consumption of oil is growing very slowly, so most of the increase in oil extracted goes for export,' he said. However, Arbatov explained that the limiting factors on extraction are more technical than natural. 'We don't have any ready fields like Iraq which we could quickly put into use. Neither do we have any that we could quickly develop and bring on stream,' said Arbatov. 'As for currently operational fields, we have limits that restrict the volume of oil extracted annually to 2-3% of overall reserves.'
Arbatov believes that 'it's necessary to think about creating an oil reserve.' 'In favourable conditions this oil can be supplied to the market, and in unfavourable conditions the reserve will allow drilling to continue and extraction to continue apace. In between, this highly liquid oil which has already been extracted can be used to secure loans,' he said.
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