Sechin allows decline of oil production by 25-30 million tons a year in three years

In 2016 freezing of the export oil duty creates the risk of decline of oil production in Russia by 25-30 million tons a year in the coming three years, Igor Sechin, Rosneft President, said.

On October 10, 2015 the government has introduced into the Russian parliament the draft law on freezing of reduction of export oil duty, in 2016 it is planned to remain the duty at the level of 2015 – 42%. The tax maneuver, which is effective in the oil industry since January 1, 2015, envisages growth of oil tax and reduction of export oil duty to 36% in 2016.

“During six months the oil industry has gotten a negative monetary flow and one should also bear in mind that current oil production is stable. But I would like to pay attention to the fact that these results have been achieved owing to the investments of previous years.. one, certainly, needs to support, but not remove resources from the existing investment programs,” said Rosneft President at the Investment Forum VTB Capital “Russia Calling!”

Igor Sechin also added that the situation with the investment programs is getting worse after making a decision to maintain the export duty. “If the tendency continues, in the coming three years we will have reduction of production by 25-30 million tons of oil a year,” he added.—0—