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By Ed Crooks: September 23, 2016

One of the most reliable features of negotiations over oil production is a divergence between what countries say and what they do.

Three weeks ago, Russia and Saudi Arabia were discussing co-operation to stabilise the oil market. This week there was talk of a year-long agreement between Russia and Opec to cap production. At the same time, however, Russia has been stepping up its drilling in the mature fields of western Siberia, taking its oil output to new record highs. Its production is forecast by Goldman Sachs to grow a further 590,000 barrels per day over the next three years.

On Thursday Kirill Molodtsov, Russia’s deputy energy minister, suggested the country could “in theory” cut oil production by 5 per cent, but said no agreement had been reached. Alexander Novak, Mr Molodtsov’s boss, said he did not expect a 5 per cent cut to be on the agenda next week, when he meets his Opec counterparts on the sidelines of the International Energy Forum meeting in Algiers on September 26-28.

Bloomberg BusinessWeek carried some vivid reporting from Venezuela, the country with the world’s largest oil reserves, and concluded that in spite of the country’s deepening crisis, “the government appears—for now—secure.” Not coincidentally, Venezuela is one of the countries sounding most positive about the prospects for an Opec agreement.

Iraq, another country that has been enthusiastic about an Opec deal, also has an economy on the brink of collapse. On Friday morning Saudi Arabia proposed that large producers could cut output by 1m barrels per day if Iran agreed to freeze its output at 3.6m b/d. Iran has so far been sticking to its target of reaching 4m b/d, so the Saudi plan can be expected to meet some resistance, but the talks at least show that efforts to reach an agreement are still alive.

ExxonMobil has been has been under investigation by the attorney-general of New York state over its statements on climate change and its calculations of the value of its assets. This week the Wall Street Journal revealed that the Securities and Exchange Commission was also looking into those issues.

Gillian Tett in the FT said the SEC’s probe showed the need for reform of reporting standards for energy asset valuations and climate risk disclosures. Liam Denning at Bloomberg Gadfly suggested the investigation was “just another cloud in Exxon’s sky.”

Eurostat produced a terrific interactive graphic on energy in the EU.

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