Russia May Ease Gas Tax Increase for Novatek, Oil Producers
Russia may ease planned increases in the natural-gas extraction tax for OAO Novatek and crude producers and review oil taxation as the government seeks to maintain oil output at a post-Soviet high.
The gas tax increases, which the government has paired with a decision to raise state-regulated domestic prices, may be revised down from proposed levels from the second half of 2013, Deputy Prime Minister Arkady Dvorkovich told reporters today at a meeting in the town of Gazoprovod in the Moscow region.
Russia, the world’s biggest energy exporter, is seeking additional funds from gas producers to compensate for oil tax breaks and help pay for President Vladimir Putin’s campaign pledges of higher salaries and pensions. Putin has called for oil output to remain at more than 10 million barrels a day for a decade. Crude and gas revenue comprised half of the 2011 budget.
Russia will seek to set a formula for the gas extraction tax by 2014 that will account for deposit type, gas prices and transit costs, Dvorkovich said. The government aims to have a formula approved in the first half of next year, he said.
Deputy Finance Minister Sergei Shatalov said May 2 that the government had supported a plan to quadruple independent producers’ tax rate by mid-2015, raising it to the same level as for state-run OAO Gazprom, the world’s biggest gas producer. That may happen only if Gazprom loses its monopoly on exports or if regulated domestic prices become as profitable as shipments abroad, the Vedomosti newspaper said today, citing an unidentified state official.
Oil output may fall “in the near term” without an overhaul of the tax system and a move to profit-based levies, Energy Minister Alexander Novak said at the meeting. The system doesn’t take the economics of the industry into account and “hinders investments,” he said.
Dvorkovich supported moving from the current focus on revenue-based export duties and extraction levies. The profit tax “will be best tested first on new fields, most likely in the offshore,” the deputy prime minister said. OAO Bashneft has proposed its fields for the test, he said.