State regulation of the oil and gas sector in 2015, prospects for 2016

The traditional series of NESF reports is concluded with the final analysis of main events in the Russian oil and gas sector in 2015.

Oil prices kept falling, which affected the sector negatively and made the government again raise taxes on FES players.

Amid the growing state budget deficit and decreasing export revenues the Russian finance ministry again paid its fiscal attention to oil and gas companies. Meanwhile, the oil industry set another post-Soviet production record. The question is whether we will see recurrence of the situation observed in the late 1980s when a record high oil output was followed by its collapse.

The report elaborates on the following issues:

• Production results of the year

  • The analysis of the situation at Russia’s leading oil and gas companies
  • Results of production of oil, natural gas and oil products
  • Stagnation in the oil industry as reflection of investment problems; decline in the natural gas output as a result of marketing difficulties

• The influence of sanctions and low prices on prospects of the sector development

  • Termination of the Arctic direction
  • The situation around offshore development
  • Problems with development of tight reserves in Western Siberia
  • Chinese and Indian companies in eastern projects – a new hope?
  • Saving on the future – reduction in investments in prospecting

• Tax battles

  • Results of the tax maneuver
  • The finance ministry is looking for the devaluation margin
  • Repressive decisions at the end of the year: freezing the oil export duty rate and preserving the planned rise in the oil production tax; advance in the natural gas and condensate production taxes
  • The finance ministry is torpedoing the sector’s transfer to the financial result taxation

• Activities of state regulators

  • The role of relevant ministries.
  • Main administrative battles: gas market reforms, offshore development, regulation of the oil services segment

• Export policies

  • The turn towards the East continues

• Prospects of developments

Contents of the report: