• 2 days Shell Oil Trading Head Steps Down After 29 Years
  • 3 days Higher Oil Prices Reduce North American Oil Bankruptcies
  • 3 days Statoil To Boost Exploration Drilling Offshore Norway In 2018
  • 3 days $1.6 Billion Canadian-US Hydropower Project Approved
  • 3 days Venezuela Officially In Default
  • 3 days Iran Prepares To Export LNG To Boost Trade Relations
  • 3 days Keystone Pipeline Leaks 5,000 Barrels Into Farmland
  • 3 days Saudi Oil Minister: Markets Will Not Rebalance By March
  • 3 days Obscure Dutch Firm Wins Venezuelan Oil Block As Debt Tensions Mount
  • 4 days Rosneft Announces Completion Of World’s Longest Well
  • 4 days Ecuador Won’t Ask Exemption From OPEC Oil Production Cuts
  • 4 days Norway’s $1 Trillion Wealth Fund Proposes To Ditch Oil Stocks
  • 4 days Ecuador Seeks To Clear Schlumberger Debt By End-November
  • 4 days Santos Admits It Rejected $7.2B Takeover Bid
  • 4 days U.S. Senate Panel Votes To Open Alaskan Refuge To Drilling
  • 4 days Africa’s Richest Woman Fired From Sonangol
  • 5 days Oil And Gas M&A Deal Appetite Highest Since 2013
  • 5 days Russian Hackers Target British Energy Industry
  • 5 days Venezuela Signs $3.15B Debt Restructuring Deal With Russia
  • 5 days DOJ: Protestors Interfering With Pipeline Construction Will Be Prosecuted
  • 5 days Lower Oil Prices Benefit European Refiners
  • 5 days World’s Biggest Private Equity Firm Raises $1 Billion To Invest In Oil
  • 6 days Oil Prices Tank After API Reports Strong Build In Crude Inventories
  • 6 days Iraq Oil Revenue Not Enough For Sustainable Development
  • 6 days Sudan In Talks With Foreign Oil Firms To Boost Crude Production
  • 6 days Shell: Four Oil Platforms Shut In Gulf Of Mexico After Fire
  • 6 days OPEC To Recruit New Members To Fight Market Imbalance
  • 6 days Green Groups Want Norway’s Arctic Oil Drilling Licenses Canceled
  • 6 days Venezuelan Oil Output Drops To Lowest In 28 Years
  • 6 days Shale Production Rises By 80,000 BPD In Latest EIA Forecasts
  • 7 days GE Considers Selling Baker Hughes Assets
  • 7 days Eni To Address Barents Sea Regulatory Breaches By Dec 11
  • 7 days Saudi Aramco To Invest $300 Billion In Upstream Projects
  • 7 days Aramco To List Shares In Hong Kong ‘For Sure’
  • 7 days BP CEO Sees Venezuela As Oil’s Wildcard
  • 7 days Iran Denies Involvement In Bahrain Oil Pipeline Blast
  • 9 days The Oil Rig Drilling 10 Miles Under The Sea
  • 10 days Baghdad Agrees To Ship Kirkuk Oil To Iran
  • 10 days Another Group Joins Niger Delta Avengers’ Ceasefire Boycott
  • 10 days Italy Looks To Phase Out Coal-Fired Electricity By 2025

Russia Set to Enact Oil Industry Tax Reform

Snowwhite

The Russian government plans to make sweeping changes to its oil tax structure and transform it to a profit-based model, according to reports from Reuters and industry sources.

The current tax structure is centered on production and exports, and has come under attack by companies claiming profit-based taxation would provide a welcome boost to output and is a more accurate reflection of exploration costs and risks. On the other hand, the finance ministry has typically opposed a profit-based tax that it feels will allow producers to conceal income and minimize tax payouts.

Pilot projects with production levels of between 200,000 barrels per day and 300,000 barrels per day would be the first to be affected by the proposed new plan. Yet Russia’s energy and finance ministries have purportedly worked out the new system for both mature and new fields.

Brownfields may see a tax cut from 16 to 20 percent depending on the price of oil, whereas greenfields in Eastern Siberia will need to pay a higher tax from 16.9 to 19.3 percent.

Other greenfields enjoying low tax rates would see increase by as much as 6 percent, per the draft of the new tax system.

The plummeting price of crude has hurt numerous countries worldwide dependent on oil for revenue and Russia has certainly not been an exception. The oil tax system has become a very sensitive topic regarding jump-starting the Russian economy as was the case earlier this year over the government’s proposal to tax funds used by oil firms for investment in developing projects.

The Russian Central Bank recently claimed national economic growth is “imminent” based on the steady price of crude at around US$45 per barrel, though the International Monetary Fund found the economy would shrink another 1.2 percent this year prior to anticipated recovery in 2017. Furthermore, an energy ministry study leaked last March predicted Russia would cease being a major oil producer as output could nosedive to half its current level by 2035.

By Erwin Cifuentes for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News