NEWSLINK: Russia expects tax reforms to boost oil output

Oil Well file photo

Russia expects tax reforms to boost oil output – Reuters – October 9, 2012 – click here for original article: http://www.reuters.com/article/2012/10/09/russia-energy-idUSL6E8L9PU620121009

Reuters covers Russian aspirations to expand oil output through tax breaks:

Russia aims to bring on line 1.4 million to 2 million barrels of oil equivalent per day with new tax reforms designed to reduce the levy on future projects and codify ad-hoc discounts currently in force, Energy Minister Alexander Novak said on Tuesday.

Tax holidays extended under the packages are expected to cover 50 fields in East Siberia. The ministry estimates the moves will render profitable some 37 billion barrels of oil equivalent, or 20 percent of Russia’s reserves.

Among them are major undeveloped fields whose licence holders say they need tax relief to put them onstream.

The discounts are expected to cover 50 fields in East Siberia containing about 20 percent of Russia’s total, among them major undeveloped fields whose licence holders say they need tax relief to put them onstream.

Russia is courting foreign investment, and promises both tax holidays, and legal changes to make more stable export taxes that now can shift monthly.

While Russia ia a top oil producer for now, some production is falling, and the Russians still rely upon oil revenue for a huge portion of the state budget:

Russia, the world’s second largest producer of crude oil, pumped 10.41 million barrels per day of oil last month, a post-Soviet record, thanks to new fields and foreign-operated projects operated under production-sharing agreements.

But its core fields in Western Siberia are declining at an annual rate of around 2 percent, and regulators have struggled to find ways of encouraging new production without robbing the state budget, which depends on energy for 50 percent of its revenue.

Russia expects tax reforms to boost oil output – Reuters – October 9, 2012 – click here for original article: http://www.reuters.com/article/2012/10/09/russia-energy-idUSL6E8L9PU620121009