Sechin assumes a decline in oil production from freeze duty

Sechin assumes a decline in oil production from freeze duty


The head of “Rosneft” Igor Sechin said that the situation is deteriorating investment programs after the adoption of the decisions on the preservation of export duties. According to him, this may lead to a decline in oil production in Russia for three years on 25 to 30 million tons annually.

MOSCOW, 13 Oct. Freeze export duties on oil in 2016 creates the risk of falling oil production in Russia for three years on 25 to 30 million tons annually, said the head of “Rosneft” Igor Sechin.

The government on 10 October submitted to the state Duma a bill to freeze the reduction of export duties on oil, rate to calculate the fee in 2016 is proposed to maintain the level of 2015 — 42%. Valid from 1 January 2015 the tax maneuver in the oil industry expected an increase in the severance tax on oil and reduced rates for calculation of export duties on oil to 36% in 2016.

“In the first half of the oil industry has received a negative cash flow, it should be aware that there is a current stability of production. But I want to note that these results are obtained as a result of investments made in prior years… of course, we must support, not to withdraw the resource from the existing investment programs,” — said the head of “Rosneft” at the investment forum “VTB Capital” “Russia calls!”.

Also Igor Sechin stressed that the situation is deteriorating investment programs after the adoption within the budget process, decisions on the preservation of export duties. “If this trend were to continue, over the next three years we will experience the effect of a decrease in production of 25-30 million tons of oil annually,” he said.

Thus, Sechin noted that the principled position is that the key changes growth models should be associated with the preparation of tax system and ensure the investment process.