The Organization of the Petroleum Exporting Countries, Russia and other oil producers are meeting in Vienna this week to discuss a possible increase in production, after reducing their output by 1.8 million bpd since January 2017.
As part of Russia’s commitment to the deal, Lukoil cut output by 45,000 bpd.
Lukoil CEO Vagit Alekperov said the company hoped for the easing of production curbs, which helped cut a global supply glut and boosted oil prices that had slumped below $30 a barrel in 2016. Brent crude is now trading around $73.
“I think that the price of oil will be between $70 and $75 per barrel until the end of the year,” Alekperov said. “We are counting on that.”
Lukoil could raise output by 23,000 bpd if OPEC and its allies agreed to gradually restore output, Lukoil First Deputy President Alexander Matytsyn said.
The company was producing 1.8 million bpd in first quarter of 2018.
Lukoil aims to boost its share price with a buyback program over five years worth $3 billion, set to start in the second half of 2018. Its shares rose 0.4 percent on Thursday.
Matytsyn said 100 million treasury shares could be redeemed by the end of 2018. That would leave the company holding 40 million treasury shares, which it said would be used in an incentive program.
Lukoil said it would add another 50,000 bpd in capacity at Iraq’s West Qurna-2 field by the end of 2019 to reach production of 450,000 bpd, Alekperov said.
Regarding projects in Mexico, Alekperov said the Russian firm was working on a deal with its Italian partner Eni on three or four blocks “to share risks in terms of geology, finances and infrastructure.”
“We agreed in principle, now the details are being discussed,” he said. He did not elaborate.
Eni and Lukoil won offshore exploration and production licenses in the Cuenca Salina basin in Mexico in March.
Eni will have 75 percent in a joint venture that holds the operating license, while Lukoil would have the remaining 25 percent. The Russian firm is considering swapping licenses in Mexico with Eni.
Reporting by Oksana Kobzeva; Writing by Denis Pinchuk and Kevin O’Flynn; Editing by Jason Neely and Edmund Blair