​Russian energy minister Novak said to meet oil CEOs Monday

Russian Energy Minister Alexander Novak Image: Kremlin

Russia’s Energy Minister Alexander Novak will meet executives from the nation’s key oil companies Monday as global crude prices hover at their lowest in nearly two decades, according to a person familiar with the schedule.

The ministry plans to hold the meeting face to face rather than via a video link, the person said on condition of anonymity as the plans are not public. Last week, Deputy Minister Anastasia Bondarenko said the authority wanted to hold most of its meetings via teleconferences because of the coronavirus outbreak.

Novak had said before that the ministry may have to discuss production plans with the companies’ heads regularly over global oil-price volatility.

The oil companies in Russia can withstand low prices thanks to the flexible tax system and the ruble-to-dollar exchange rate that largely follows crude prices. But the state budget will see a deficit this year and the economy will likely contract, sustaining a double blow from the plunge in energy prices and the spread of the virus, which is threatening to push the world into a recession.

The government, which assumed oil at just above $40 a barrel in its budget, started tapping its wealth fund two months after President Vladimir Putin promised higher social spending and faster economic growth.

Russia’s key producers last year had combined operating and capital spending costs of less than $15 per barrel, according to Bloomberg calculations based on financial reports.

© 2020 Bloomberg L.P.

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