Main page > Products > The fuel and energy complex of Russia - Series of analytical reports > State regulation of oil and gas sector in 2013, prospects for 2014

State regulation of oil and gas sector in 2013, prospects for 2014

State regulation of oil and gas sector in 2013,  prospects for 2014

This is a traditional report by NESF that sums up main developments and tendencies in 2013.

The year was marked by new mergers and acquisitions, debates on nationalization or privatization in the sector, new export contracts and attempts of the state to change taxation procedures and simultaneously not to affect current budget revenues.

Key topics of the report:

  • Production results of the year

    • The 2013 turned out to be formally positive: both oil and gas production advanced. Oil exports somewhat dropped, but the condition of gas exports was very favorable. However, the situation in the upstream segment causes more and more concerns: oil production growth is already on the level of statistical error, and, most importantly, there are no projects or ideas that can accelerate it.
  • Struggle for property

    • New acquisitions by Rosneft triggered expectations of total nationalization and restoration of something similar to the Ministry of Oil Industry of the USSR. But in reality it is unlikely to happen. Moreover, the merger of Rosneft and TNK-BP has not produced any synergy effect yet. But it is more important to point out that Russian elites prefer being legal billionaires rather than Red Directors. This is why preparations for privatization were carried out in the sector throughout the whole year.
  • Taxation policy

    • Results of application of the 60-66 system, logic and practice of reforms in the fiscal system. The lack of new sources of revenues to cover swiftly growing budget expenses in fact deprived the FES of a chance of real reduction in the general tax burden.
    • To close budget gaps the finance ministry unavoidably addressed the constant donor. No wonder the year 2013 is remembered by a number of decisions rather unpleasant for the sector. The replacement of the export duty with a new rate of the minerals production tax alone will lead to additional $170bn in taxes on oil companies in the next three years.
    • The innovative fiscal system for offshore deposits and tax preferences on hard-to-recover oil should not mislead us. The logic of taxation changes is very simple. It is necessary to collect as much money from oil companies as possible “here and now” by providing them with tax preferences that will work in the rather distant future.
  • Exports dilemma

    • Russia keeps expanding oil supplies to China by signing new contracts. Amid stagnating production they raise quite an acute question: does it mean that we are surrendering our positions on the European market? Certainly, we need to examine economic expediency of such policy.
  • Domestic market

    • Supplies of oil products to the domestic market are growing simultaneously with their prices. The reasons are the state excise policy and rather weak competition.
  • Medium-term forecast of developments

Contents of the report:

Introduction 3
Chapter 1. Production results 4
Chapter 2. Struggle for property 20
Chapter 3. Taxation: results of 60-66 system application,logic and practice of reforms in fiscal system 26
Chapter 4. Production incentives in new regions 35
Chapter 5. Exports: the East instead of the West 46
Chapter 6. Domestic market 55
Conclusion. Medium-term prospects of developments 62
Date of release: January 29, 2014

If you are interested to obtain please contact » Elena Kim

Other issues:
Bookmark and Share

Analytical series “The Fuel and Energy Complex of Russia”:

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.
Oil and Gas Sector Regulation in 2022 and Prospects for 2023
Gazprom at the Forefront of Economic and Political Battles with Europe
Gazprom is being actively thrown out of the market. Its annual supplies to Europe have shrunk from the previous 150 billion to 65 billion cubic metres of gas. European officials assure that they have already learnt how to live without Russian gas, so they will bring its purchases down to but nominal values in 2023. Their main hope is liquefied natural gas. Today the EU must make a crucial decision: whether it has passed the point of no return in gas business with Russia and whether it is certain that its economy will endure without supplies of Russian pipeline gas. Or, on the contrary, Europe will realise after all that the gas balance will not be achieved and the payment for so headlong a rush for LNG will be disproportionate. Assessment of the potential volume of LNG that will appear on the market before the end of the current decade will be the most important factor for making the decision.

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

Rambler's Top100
About us | Products | Comments | Services | Books | Conferences | Our clients | Price list | Site map | Contacts
Consulting services, political risks assessment on the Fuel & Energy Industry, concern of pilitical and economic Elite within the Oil-and-Gas sector.
National Energy Security Fund © 2007