Russian Minister Sees Stagnant Oil Output

Russia’s oil output would be stuck at its 2011 level for the next 20 years as the country has exhausted its capabilities to promote oil extraction, Economic Development Minister Elvira Nabiullina said Tuesday.

“We have exhausted the possibility for growth based on the large-scale growth of extraction and export of hydrocarbons,” she told an international conference on socio-economic development.

“Russia’s oil output will stabilize at the 2011 level for the next 20 years,” she added.

The minister stressed that such stagnation means the country’s budget revenues from hydrocarbons exports could be limited and the oil and gas industry would not provide the budget with the same revenues like today.

Nabiullina also warned that Russia’s trade balance could become negative in 2014, unless the country’s exports would stop to rely on raw materials.

To keep Russia’s trade balance positive, exports of processed goods must grow 2.5-fold by 2020 and 7.5-fold by 2030, stressed the minister, adding that Russia’s positive trade balance is currently about 100 billion U.S. dollars per year.

In addition, Nabiullina noted that her ministry has increased the 2012 oil price forecast from 100 to 115 dollars per barrel on international markets while maintaining the forecast for 2013 and 2014, respectively at 97 and 101 dollars per barrel.