CEO: Surgutneftegas to keep capital expenditures at 210 bln rbl ‘18

SURGUT, Khanty-Mansi Autonomous District, Jun 29 (PRIME) -- Russian oil and gas producer Surgutneftegas’ 2018 will be flat on 2017 at 210 billion rubles, CEO Vladimir Bogdanov told reporters on Friday.

“The level (of capital expenditures) is the 2017 one of 210 (billion rubles). Everything is stable for us: production is stable, as well as capital expenditures,” Bogdanov said.

He said that the absence of a clear-cut and stable tax policy in the oil industry hurts investment and limits growth.

“We need to stop this mess in taxation, it will end badly. We have a new tax each day. They would say tomorrow: let us have a sales tax, some other tax. We do not call the shots, we are just the executors,” Bogdanov said.

He said that Surgutneftegas keeps the gasoline prices at the level of May 30, as agreed with the government, although reduction of fuel excises has not been made yet.

Retail fuel prices in Russia will rise in 2019, Bogdanov said. “We have a 75% tax component in the price of gasoline and diesel fuel that we sell! In fact, not only the excises will rise from 2019, the mineral extraction tax (MET) for any oil with the tax maneuver which will be reflected in oil product prices in the first place, and also a value-added tax growth by 2%.”

He also said that Surgutneftegas expects a U.S. $70–75 per barrel oil price in 2018 but bases its budget on $50 oil price. He also said that the company will raise the production proportionately to Russia’s higher quota under the OPEC plus non-member agreement.

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