Low oil prices could push Russia to curb new fields

By Katya Golubkova and Vladimir Soldatkin

MOSCOW, Feb 20 (Reuters) - Russia will consider linking the launch of new oil deposits to global crude prices, a policy that would allow oil firms to store up reserves and cut exploration budgets in times of low prices.

The proposal was made at a Feb. 12 meeting of government officials and oil executives in the refining town of Kirishi, the minutes of which were seen by Reuters on Friday.

A proposal was also made to set an allowed deviation of the annual production required by a licence agreement to oil price. The current subsoil law requires licence holders to produce a certain amount of oil or lose the right to the field.

Several government ministries will discuss the proposed changes to the subsoil law by May 1, the document said.

After a decade of growth, Russian oil production declined 0.9 percent last year and the government is pinning its hopes on a new generation of projects in the relatively unexplored regions of East Siberia and the Arctic to keep output rising.

Russian oil firms, which say last year's round of tax cuts are insufficient to maintain a high pace of exploration, are considering budget cuts after oil prices fell below $40 a barrel, less than a third of the record peaks hit last July.

The Kirishi meeting document does not have the suggested price level. Analysts said that some projects could be postponed until oil is back to $100 per barrel.

"All depends on the quality and production rate of a well... But it is clear that offshore projects are most likely not expedient to launch at the current price environment," said Valery Nesterov from Troika Dialog brokerage.