Rosneft Plans to Boost Capital Spending 23% on Refinery Upgrades

OAO Rosneft, Russia’s largest oil producer, plans to increase capital spending at least 23 percent this year as it boosts investments in refinery upgrades following a change in tax rules on heavy products.

Rosneft plans to invest more than 480 billion rubles ($16 billion) this year, according to a presentation posted on the company website. Capital expenditures amounted to 389 billion rubles last year and 271 billion rubles in 2010, according to the presentation.

Prime Minister Vladimir Putin raised export taxes on residual products such as fuel oil and lowered the duty on middle distillates such as diesel in October to encourage refinery upgrades.

Net debt increased 6 percent to 527 billion rubles at the end of the first quarter from 497 billion rubles on Dec. 31, the Moscow-based company said in its results for the period.

To contact the reporter on this story: Stephen Bierman in Moscow at sbierman1@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

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