UPDATE 2-Russia tells OPEC: We never promised you anything

Published: 11 Sep 2009 02:13:23 PST

* Energy Minister says any OPEC criticism unjustified

* Current oil price high enough for new field development

* Will regulate oil sector should prices plunge again

* Zero export duty from East Siberia applicable end-Sept

MOSCOW, Sept 11 - Russia will make no apologies to OPEC for boosting oil production to record monthly highs and can invest in new fields while crude trades at current levels around $70 per barrel, the country's energy minister said.

Sergei Shmatko told reporters the world's No. 2 oil exporter would apply zero export duties for East Siberian oilfields from the end of September, although it would step in to regulate the oil sector should world prices plunge again.

"We never had any obligations (to OPEC). When we were communicating, we never promised anything," Shmatko said late on Thursday, after OPEC members decided to retain output cuts.

"To say that we do not abide by the rules is not correct."

The Organization of the Petroleum Exporting Countries agreed on Thursday to keep oil output steady after agreeing last year to pump a record 4.2 million less barrels per day (bpd).

Speaking after the meeting in Vienna, OPEC Secretary-General Abdullah al-Badri said he was not encouraged by Russia's lack of tangible cooperation in cutting supplies.

Russian oil output, in contrast, hit a record monthly high of 9.97 million bpd in August as top producer Rosneft launched its huge Vankor field in the Arctic.

As crude prices have doubled from January's lows -- aided by OPEC cuts -- Russia's oil-heavy economy has recouped some of the budget revenues lost last year and shows early signs of recovery from its first recession in a decade.

"One can always say that, at a higher price, some projects will be more profitable, but today the price of oil does not set any limits for the oil industry's development," Shmatko said.

Russia and OPEC rekindled their courtship last year, but the relationship has gone cold. Non-OPEC countries were not invited to attend this week's meeting as observers.

"We do not want to be sitting and guessing whether we will be invited to the next meeting," Shmatko said. "Good for them to issue comments when our representative is not even there."

GAS OPEC

Worried about stagnating production as West Siberian oilfields run dry, Russia has offered tax breaks worth billions of dollars to help its companies develop remote fields.

Shmatko said Russia would implement a long-awaited zero duty on exports from 13 oilfields in East Siberia by the end of September. No time limit for the duty is set.

Shmatko said, however, that Russia would regulate the sector should oil prices plunge again. Unlike OPEC, Russia cannot cut output at Siberian fields quickly due to technical reasons, and instead regulates the industry largely through taxation.

"If there are negative dynamics in the price of oil, we will regulate," Shmatko said.

The minister said Russian relations with OPEC could play a role in talks to formalise an 11-strong international gas body that some have likened to the oil group, Shmatko said.

Russia, the world's No. 1 gas producer, would present its own candidate to chair the Gas Exporting Countries Forum ahead of its December meeting in the Qatari capital, Doha, he said.

Shmatko will also visit Bulgaria this month to assess the new government's review of plans for a nuclear power plant and participation in Russian-backed pipelines..

"If every new government were to pull out of legitimate deals signed by a previous one, how could we work with such a country?" said Shmatko. "To say there were secret deals, and that the opposition knew nothing about them, is not correct."

Russia is also seeking re-entry to Iraq's oil sector to revive lucrative deals secured during Saddam Hussein's tenure. Shmatko said he got the go-ahead from Iraqi Prime Minister Nuri al-Maliki this week to prepare a joint report on energy ties.

"If we play it right, they won't get away from us," he said.