Sechin: Saudi Arabia is actively engaged in predatory pricing in the oil market

MOSCOW, October 13. Saudi Arabia is actively engaged in predatory pricing at the oil price, came out even on the Polish market. This was stated during the forum “Russia calling!” the head of “Rosneft” Igor Sechin.

“Returning to competition, I want to say that we see now that Saudi Arabia first came out even on the Polish market, the supply of raw materials through Gdansk. Actively engaged in predatory pricing,” he says.

“The struggle for the market is one of the factors that affect the price of oil. This is reflected in the budget revenues”, – concluded the President of the state company.

About OPEC

Sechin believes that the role for the regulation of the global oil market actually shifted from OPEC to the USA.

“The regulation that was previously performed by the countries belonging to the OPEC organization, was formed at the regional US market, which has become the most important region on a global scale,” said Igor Sechin.

According to him, it happened not because of the phenomenon of shale oil, and because of the presence of the complex of factors affecting the development of all competitive oil market: financial sources, financial derivatives, exchanges, developed systems of pipelines and large number of contractors.

On annual budget planning

“Rosneft” has to go to annual budget planning because of the uncertainty of the world situation, said Igor Sechin.

“Because of the uncertainty of the world situation we are forced to switch to annual budgetary planning, although the last forecast we had for three years,” he said.

According to the head of “Rosneft”, the main factor of uncertainty is the growth of US influence on the world oil market, as well as statistics on the decline of the shale oil.

Earlier Igor Sechin said that oil analysts are ignoring a number of factors that influence the balance of supply and demand, in particular the distortion of the production statistics in the US, where the drop in production for six months. It creates conditions for price manipulation.

Sechin also noted that the costs of Russian oil companies are the lowest in the world – $4 per barrel. “Our costs are the lowest in the world, I declare,” said he.

“The oil industry is about $4 per barrel, while LUKOIL’s – $4,5,” – said Sechin, adding that “”Rosneft” the figure of $2.8 is the best indicator in the world.”

According to him, the lowest costs in the world are not a reason for tax exemptions. “Of course, we are constantly engaged in cost reduction, but it is not the cause of exceptions to investment programs”, – he said.

Sechin believes that the financial situation in Russia is stable. “Of course, the financial situation is stable. We have a liquidity reserve which allows our current activities,” he said.

About the export duty on oil

The preservation of export duties on oil can cause a decrease in production of 25-30 million tons annually for three years, said the head of “Rosneft”.

“The situation is deteriorating investment programs after the decision in the budget process for the conservation in 2016 at the current level of export duties on oil. If this trend were to continue, within the next 3 years we will experience the risks of oil production decline by 25-30 million tons of oil annually, it also will produce the negative fiscal effect,” he said.

Sechin also noted that the position of Rosneft is that the key changes in growth models should be associated with stable tax system and the investment process.

“At the present stage, the tax system should have a universal character,” he said.

Earlier it was informed that the government of the Russian Federation has prepared the order about entering into the state Duma draft amendments to the Tax code that allows for the increase of the met rate on gas for “Gazprom” to get additional revenue to the Federal budget in 2016, as well as to the law “On customs tariff”, according to which the size of the rates of export customs duties on oil proposed at the 2015 level and refuse to lower it to 36%.

The increase in met on gas for Gazprom, according to calculations by the Ministry of Finance will provide the additional budget of about 100 billion rubles, the preservation rate of export duties is about 200 billion roubles.