Energy minister says Russia may cancel oil export duty

MOSCOW, Oct 24 (PRIME) -- Russia may cancel its oil export duty, but it should approach the measure with caution, Energy Minister Alexander Novak told reporters on Tuesday during the Russia Calling forum.

“There is discussion of the measure by the oil and gas sector and the Finance Ministry. I think that there is such a possibility in the future, and it even would be reasonable…But we should approach it with caution, as not all of our oil refining plants have finished their upgrades,” he said.

The current oil export duty “is a warranty for oil refining, it ensures minimal margins of oil refineries and investment,” he said.

“As of today, the oil price of U.S. $55–60 allows the upgraded plants to have an oil refining margin of 3,900 rubles, while the plants that have not upgraded have a margin of 1,100 rubles,” he said.

TAXATION FOR BROWNFIELDS

Russia has to improve taxation of production at brown fields, Novak said.

“The (taxation) system is good, and as I said it stimulates development under volatile prices. Still, the system needs improvement for brown and acting fields where production was launched a long time ago,” he said.

“We contributed additional suggestions on adjustments of the taxation system last Friday ito launch pilot projects in Russia on the basis of a so-called financial result taxation system (the added income tax).”

The pilot project to introduce the added income tax for some fields will be launched from 2018. Oil companies Gazprom Neft, Lukoil, Surgutneftegas, and RussNeft have filed bids for the projects in February with a combined annual oil production of about 7 million tonnes, and in October Rosneft submitted requests to include 15 fields with a combined output of 6.13 million tonnes into the project.

(57.4706 rubles – U.S. $1)

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