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The Russian energy ministry has proposed changes to a draft oil production law that it says could boost production by around 900.000 tonnes per year. First Deputy Energy Minister Alexei Texler said on Wednesday.
Debate about the law has dragged on for years. as the Finance Ministry expressed concerns the changes could reduce state revenues.
Oilfields. especially in West Siberia. have become increasingly depleted and the new tax regime is seen as an incentive to produce more oil in a country which is heavily dependent on sales of energy for state revenue.
Russia’s parliament has approved the new profit-based tax on the oil industry on a first reading. Currently. taxes are based on production – via a mineral extraction tax – and exports.
The new tax will initially cover four groups of oilfields. including new deposits in far-flung regions of East Siberia. fields which enjoy a lower export duty. and some highly-depleted fields in West Siberia.
The new taxes. at least on an initial stage. will be applicable to only limited number of fields. depending on how big their reserves are.
Texler said the ministry had proposed increasing quotas for the groups of oilfields eligible for the new tax from 50 million tonnes of reserves to 150 million tonnes. and the changes would be debated in the second. crucial. reading.
In addition. the new proposal would raise the limits for a single oilfield. to which the new taxation could be applicable. to 20-30 million tonnes of reserves from 10 million tonnes to increase the scope for the taxation.
The proposals would boost production of oil by 900.000 tonnes per year (18.000 bpd). Texler said. He didn’t say. to which level. The law is expected to be implemented starting from 2019.
A forecast published in September by the economy ministry. saw Russian oil production rising to 553 million tonnes per year in 2019-2020.
Lawmakers must approve the draft in three readings before it is sent it to the upper house of parliament and then President Vladimir Putin for signature.
