Russian Government Decided To Cut Oil Output To Avoid Economic Crisis

Prime Minister Mikhail Kasyanov will meet on Friday with heads of Russian oil companies to discuss the situation on the world market of energy products, which is catastrophic for Russia. Agreement may be reached during the meeting to cut oil exports and, possibly output, by Russian companies beginning in January 2002 by 100,000-150,000 barrels a day. Earlier, Russia declared a purely symbolic oil output cut -- by 30,000 barrels a day while OPEC member countries insisted that the figure for independent oil producers, which are not OPEC members, should be 500,000 barrels to maintain world oil prices and prevent the collapse of the oil market. According to information provided by some media, which has not been confirmed in Moscow so far, Mexico, Norway and Russia have already agreed to reduce oil output by 500,000 barrels a day. The sharp drop of world oil prices jeopardized the execution of the Russian budget and could lead to economic crisis in Russia. That is why the government has decided to accept OPEC and other countries' recommendations concerning the oil output. However, the government and the fuel and energy ministry did not confirm and did not refute this report, which shows that the government members are not unanimous on this issue so far. Earlier, YUKOS, a major Russian oil company, came out against the cuts in the oil output.