MOSCOW, October 8. /TASS/. The incentives offered by the Russian Ministry of Energy to stimulate oil production will lead to additional hundreds of billions of investment per year to the oil industry, and extend the marginal level of production in Russia for at least 5-7 years, Deputy Energy Minister Pavel Sorokin told TASS.
"If we adopt a complex of incentives, then in a few years we could get several hundred billion rubles of additional investment per year," he said. "We can maintain production volume for another 5-7 years at least, only by working in traditional production regions. However, the main thing is that it will allow attracting investments, reach the industry’s potential, making a significant contribution to accelerating GDP growth rates and securing orders for high technologies and import substitution. Without such measures, the opportunity will be lost," he added.
"We will face the decline in production across the country by the time when greenfields or regions with benefits will exhaust their growth potential. We estimated, this can be in 2022-2023. This will entail an extremely adverse impact on investments with the multiplication effect and will result in dramatic reduction of budget revenues. Therefore, preventive measures should be undertaken," the official said.
Sorokin disagrees with the position of the Finance Ministry of Russia that benefits lead to dramatic production growth followed by speedy collapse. "We have a half of resources in the Khanty-Mansi Autonomous District under development. They have a natural profile of production drop. It will decline when development economics will be impaired by declining production rates, growing water cut, and due to geological factors - this is inevitable," he said.