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. Last Updated: 07/27/2016

Oil-Field Reserve Proposed

The government on Thursday appeared to be making progress toward its goal of influencing the global oil market as the Natural Resources and Environment Ministry published a proposal to create a reserve of lucrative oil fields.

Under the proposal, the Cabinet will have the power to designate any oil deposit as off-limits for development if it is near existing pipelines, roads and production facilities or holds at least 30 million tons in reserves, the ministry said in a statement.

Deputy Prime Minister Igor Sechin told OPEC ministers in December that Russia was considering measures such as setting up a reserve of oil fields as a way to adapt to changes in demand for oil, speaking after the prices took a steep dive. Energy Minister Sergei Shmatko said last week that it wouldn't be "thrifty" to hand out production licenses for easy-to-develop fields when oil prices are low.

The Natural Resources Ministry's plan has the status of a draft decree and will have to win the Cabinet's approval before it takes effect. The document's publication on the ministry's web site is the next step in the document's approval procedure, after Shmatko said last week that his ministry had submitted its proposals at the end of April.

Also on Thursday, the Organization of the Petroleum Exporting Countries decided to keep production quotas unchanged at its meeting in Vienna, banking on a year-end recovery in demand.