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. Last Updated: 07/27/2016

Gazprom Leads Firms In Cut in Gas Output

Domestic oil and gas firms showed rare solidarity Wednesday by quickly responding to a call from Gazprom to cut output to help handle excess gas after an abnormally warm winter.

Gazprom head Alexei Miller met executives from oil majors LUKoil, TNK-BP and gas firms Novatek and Itera, which agreed to reduce production by 8 percent until the end of the third quarter.

Gazprom said it would be forced to trim its own output to 557 billion cubic meters from the previously planned 560 bcm this year following a dramatic drop in exports to Europe. Last year, Gazprom produced 556 bcm.

"Today we have come to an agreement that all producers, including independent firms, have to cut gas production so that Gazprom's system can work stably," LUKoil head Vagit Alekperov, told reporters.

"I don't think we are talking here about a long-term cut. These are extraordinary circumstances, which are linked to the unusually warm winter," he said after the meeting, also attended by Viktor Vekselberg from TNK-BP, Leonid Mikhelson from Novatek and Igor Makarov from Itera.

Alekperov said LUKoil would have to review its investment program for the year.

It was unclear whether Rosneft or private Surgutneftegaz, the country's two top gas producers among oil firms, agreed to join cuts.

Gazprom's exports outside the former Soviet Union fell in the first four months of 2007 by 21.7 percent year on year to 46.79 bcm due to a much warmer winter than in 2006, when temperatures plunged toward record lows.