Vagit Alekperov supports the extension of a deal between Russia and Opec to reduce crude output if oil prices fall below $50 a barrel © Bloomberg
Sanctions against Russia are likely to stay in place for at least the next 10 years, the country’s second-largest oil company has said, at a time of sharply deteriorating relations between Moscow and the west.
Russian oil and gas companies should prepare for long-term restrictions, Lukoil’s chief executive said, while also backing the extension of a deal between Russia and Opec to reduce crude output if oil prices fall below $50 a barrel.
“Our current strategic plan for the next 10 years is that sanctions will remain in place,” Vagit Alekperov told the Financial Times. “I don’t perceive that sanctions will be removed in the coming years, and even [when they are] it will be a lengthy and very complicated process.”
Mr Alekperov is Lukoil’s largest shareholder and owns about a quarter of the shares, having founded the company from state oil assets during the break-up the Soviet Union. With daily production of 1.8m barrels, it is Russia’s largest private oil producer and second only to Kremlin-controlled Rosneft.
Washington, Brussels and other western capitals have imposed financial and technology-sharing sanctions on many Russian energy companies, including Lukoil, in response to Moscow’s 2014 invasion of Ukraine and annexation of Crimea.
Despite hopes in Moscow that Donald Trump’s entry into the White House would usher in better relations, allegations of Russian interference in the 2016 election have only increased distrust between the two countries.
“Three years ago I was in Washington and met the gentleman in charge of the US sanctions department. That was at the beginning of the events related to Ukraine,” Mr Alekperov said in an interview. “And he said: ‘If Russia does this and that, then we will do that and this’. And so I told him: ‘My country is never going to leave you unemployed.’”
The 67-year-old praised a landmark agreement between oil cartel Opec and Moscow last year that cut oil output and helped raise crude prices to about $55 a barrel, describing it as a “new instrument that has been established that can impact the [oil] price, a control system”.
Mr Alekperov echoed remarks by Russian president Vladimir Putin last week that the deal could be extended past its March 2018 expiry date.
“If the price is less than $50, then we must go for an extension. If it is $55, then there is no need. Just a gradual withdrawal,” he said.
“The most important thing for now is to not allow another time of $100 a barrel, that would be major trouble for the industry. We want to have a predictable level of $55-$60 at least for the 10 years to come . . . and keep both consumers and producers happy.”
A former Soviet oil minister who is now worth an estimated $14bn, Mr Alekperov said that unlike some other Russian energy barons, he is not perceived as a “shark of capitalism”.
He also said that he did not fear any approaches from Rosneft, whose powerful chief executive Igor Sechin has swallowed up a number of smaller rivals in recent years.
“So far [Mr Sechin] has been made to buy those assets, assets available for sale. TNK was sold by shareholders. Bashneft was for sale,” he said, referring to two companies acquired by Rosneft. “Lukoil is not.”
“And there is no other mechanism to buy, apart from us selling. So I do not expect any action to be taken against me. I am not providing any grounds for that.”