Russian oil producer, Gazprom Neft, has said it plans to increase oil production by 4.5-5 percent in 2017.
This is less than the oil producer had announced before Russia joined a deal to cut global production with Organization of the Petroleum Exporting Countries.
Gazprom Neft’s CEO, Alexander Dyukov, said the company may temporary stop production at several oil wells but the main bulk of output cuts will be due to lower production growth rates.
"It is quite possible we will decide to freeze production at some wells. This will be part of an optimization effort aimed at attaining the maximum economic yield. Of course, each well and oil field has its own economy,” he noted.
Dyukov went further saying that Russia’s fourth largest oil producer expected to produce 85.8 million tonnes of hydrocarbons in 2016 and that net profit would rise significantly this year.
According to Dyukov, the company would reach production levels of 150,000 barrels per day at its Iraqi Badra field in 2018, not 2017 and that its budget for 2017 was based on an average oil price of $48 per barrel.
Gazprom Neft is a division of Russian energy company Gazprom.
Media reports say Russia's stance on a production plan set to enter into force next week has been fluid, with the Kremlin advocating for a freeze rather than a cut in production. The country set up an advisory panel that would monitor compliance with the OPEC agreement.
OPEC members agreed to cut production by about what it expects in demand growth in 2017. Most of that cut depends on non-member state cooperation and relies in large part on Russia to be effective at easing the supply-side strains that dragged oil prices to below $30 per barrel in early 2016.