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New Legal and Fiscal Procedures in the Oil and Gas Industry

New Legal and Fiscal Procedures in the Oil and Gas Industry

There are rather contradictory developments in the Russian oil and gas industry. However, this is not surprising: the role this sector is to play in the current and most importantly in the future structure of the Russian economy has not been finally defined yet. On one side, on the eve of the elections the oil and gas sector traditionally has to play the role of a cash cow. On the other side, the danger of decline in production is becoming more than real and tax incentives for investments in green fields are becoming more important.

Besides, there are active preparations for the introduction of changes in the legislative framework of the Russian oil and gas sector. A new bill on oil is to be soon submitted to the State Duma; the document is to become almost a new oil constitution. The struggle of main clans around these issues is obviously getting tougher, especially taking into account the unavoidable transformation of the political system after the elections. Everybody is rushing to create new instruments to preserve and even increase influence after the elections regardless of who will become the president and how the future government composition will look like.

The new report of the National Energy Security Fund provides a detailed analysis of the following aspects:

  • Analysis of the general situation in the sphere of taxation of the oil and gas sector

    • Real burden on the oil and gas industry
    • Possibilities for development of new deposits under the current taxation system
    • Stories by oil producers about the tax burden: truth and fiction
    • Dynamic of net profits of companies and the share of fiscal payments in revenues
    • Correlation of profits and capital expenditures
    • Real objectives of the state in taxing the sector
  • New fiscal policy of the state

    • The new 60-66 taxation system: interests of companies and administrative clans
    • The future of the minerals production tax and prospects of introduction of the tax on additional revenues
    • Excise policy
  • Taxation preferences

    • Replacing general taxation rules with numerous private taxation procedures
    • Taxation demands of political and administrative clans, prospects of satisfying such demands
  • Creation of new legal framework of functioning of the sector

    • The bill on oil. Improvement of the shelf legislation

    The contents of the report:

    Introduction. 3
    Chapter 1.Real Level of Tax Burden on Oil and Gas Companies, Link Between Fiscal Policies and Their Desire to Invest 4
    Chapter 2.Main Lines of Transforming Fiscal Procedures in Russia’s FES 27
    2.1.Oil Sector 27
    2.2.Gas Sector 35
    Chapter 3.Sharpening of Struggle for Private Tax Preferences 40
    Chapter 4.Creation of New Legal Frames for the Sector’s Functioning 49
    Chapter 5.Prospects of Developments 62
    Date of issue April 12th, 2011

If you are interested to obtain please contact » Elena Kim

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Gazprom in the period of expulsion from the European market. Possible evolution of the Russian gas market amid impediments to exports
Russia’s New Energy Strategy: on Paper and in Fact
Outlook for Russian LNG Industry
Russian Energy and West One Year after Ukraine Conflict Began: Are There Connections Still?
Green Agenda in Russia during Bitter Conflict with West
After February 2022 the agenda was radically rewritten. Western companies began leaving Russia en masse, economic relations with the West were drastically reduced, and the Russian economy began to be pushed violently from the global economic space, hemmed in by sweeping sanctions. All that was, to put it mildly, not the best background for talking about ESG. Especially because tasks of survival and stability under unprecedented pressure became the priority in the economy. In late 2022, however, attempts to reanimate the ESG agenda already became obvious. The message is put across insistently that it is important to Russia regardless of the foreign policy situation. While earlier the “green pivot” was seen as an opportunity to attract Western investors and their technological solutions to Russia, now Keynesian reliance on domestic manufacture is discussed.

All reports for: 2015 , 14 , 13 , 12 , 11 , 10 , 09 , 08 , 07

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