* OPEC's proposals enough to balance market - Lukoil's Fedun
* Cut of up to 1 mln bpd to lift oil to $60 a barrel - Fedun
* Lukoil aims for carbon neutrality by 2050
* Fedun's full quotes in Russian
(Adds details, quotes, background)
By Vladimir Soldatkin
BRUSSELS, March 3 (Reuters) - OPEC's proposal to cut oil
production by up to 1 million barrels a day would be enough to
balance the oil market and lift prices to $60 a barrel, Leonid
Fedun, vice-president of Russian oil producer Lukoil LKOH.MM ,
told Reuters.
The comments from Fedun, who was talking on the sidelines of
the company's presentation of its low-carbon energy strategy,
suggest Russia may be willing to agree to OPEC's proposals for
more output cuts in light of the coronavirus outbreak.
The Organization of the Petroleum Exporting Countries and
its partners, a group known as OPEC+, will meet in Vienna on
March 5-6 to discuss additional steps to support the oil market
as the spread of the coronavirus risks hurting demand.
OPEC initially called for a cut of 600,000 barrels per day
(bpd) to prop up prices, in addition to existing cuts of 1.7
million bpd which are expected to be extended when expire this
at the end of this month.
It has since proposed deeper cuts of 1 million bpd though
Russia has yet to agree to any new cuts.
"Conoravirus ... is a short-lived factor which is affecting
oil prices ... There will be an OPEC (and non-OPEC) meeting,
compensatory measures will be taken which will take the excess
oil off the market and the oil price will rebound," Fedun said.
"In my view, (a joint) cut of between 600,000 bpd to 1
million bpd is enough to balance the market hit by 'black swans'
such as coronavirus. This is enough for oil to rebound to $60
per barrel," he told Reuters.
Russia is the world's second biggest oil exporter after
Saudi Arabia.
Lukoil is also Russia's second biggest oil producer, pumping
nearly 1.8 million bpd, which is on a par with OPEC member
Nigeria. Most of its oil comes from Russia but it also has
operations in a number of ex-Soviet countries, as well as in
Iraq, Africa and some other places.
Brent crude futures LCOc1 have slumped from January's peak
of $71.75 to a low for 2020 of $48.40 on Monday on concerns the
virus outbreak will hit global demand for oil.
MIDDLE EAST TIES
Partnership with OPEC is essential for Russia's budget and
for its ties with Middle East leaders because Moscow plays an
important role in a number of conflicts in the region.
Russian President Vladimir Putin met oil companies,
including Lukoil, on Sunday. He indicated that he favoured joint
action with OPEC but stressed that the current oil price level
was acceptable to Moscow, signalling that Russia's contribution
to further output cuts may be limited.
Fedun, who is also Lukoil's second-biggest shareholder, told
reporters on Monday that he expected Russia to cut its oil
output by about 200,000-300,000 bpd.
"We are ready to cut (our oil production) as much as we are
told to. Better to sell less oil but at a higher price," Fedun
said.
He also said on Monday that OPEC+ could cut output by even
more than 1 million bpd but his comments to Reuters suggest he
believes the existing proposals should suffice.
While playing down any long-term risks to global markets
from the coronavirus outbreak, Fedun said it was a carbon
emissions reduction agenda that was set to drastically change
the global oil industry, including Lukoil.
Major western oil firms have all set carbon reduction goals
of varying degrees, including reaching a net zero-carbon level
by 2050.
"Lukoil is starting to develop its own climate strategy - we
will be aiming to reach carbon neutrality by 2050 along with the
rest of Europe," Fedun said, adding that his firm was looking to
expand further into solar and wind energy along with hydropower.
Fedun also reiterated that Lukoil aims to allocate all free
cash flow to dividends, while also taking spending on share
buyback programmes into consideration.