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Russia’s new oil taxation not to hit Rosneft’s profit — official

June 09, 2014, 18:03 UTC+3 MOSCOW
The new oil taxation reform envisions a gradual increase of mineral extraction tax (MET) and a reduction of light oil product and crude export duties
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© AP Photo/Mikhail Metzel, File

MOSCOW, June 09. /ITAR-TASS/. Rosneft’s Far Eastern projects profit will not be hurt by Russia’s changes to the oil taxation system, which means a gradual increase of mineral extraction tax (MET) and a reduction of light oil product and crude export duties, Finance Ministry’s Tax, Customs Duties and Tariff Policies Department Director Ilya Trunin told reporters Monday.

Rosneft CEO Igor Sechin has criticized the reform, saying that the changes will make it impossible for the company to develop new deposits in Siberia and the country’s Far East, and most of all they will damage Eastern Petrochemical Company.

“In accordance with our estimates, this is not the case. If this is true, the things that Sechin said, of course, we will not carry out the reform, we will abandon it because no damage to any oil company has ever been our target, and least of all, any damage to Rosneft,” Trunin said.

Eastern Petrochemical Company will not produce much dark oil products and this is why there is no threat to its margins, he said.

Trunin said, referring to President Vladimir Putin’s proposal to set a zero MET for deposits which will produce gas to be supplied to China, that this proposal needs a thorough discussion. “Last year we accepted a new MET taxation construction that implies zero tax holidays for Far Eastern projects. There are incentives there as it is. New advantages have to be discussed,” Trunin said.

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