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Russia's Lukoil negative towards idea of zeroing export duty on oil — official

March 24, 2016, 18:06 UTC+3 MOSCOW

According to Lukoil's Vice President Leonid Fedun, such a chenge in conditions would be a disaster as the company's projects were designed for 15-20 years

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© Valeriy Matytsin/ITAR-TASS

MOSCOW, March 24. /TASS/. Lukoil is negative towards the idea of zeroing export duty on oil, the company’s Vice President Leonid Fedun told reporters on Thursday.

"Extremely negative, for the simple reason that we need tax stability. The worst thing for business is not understanding that can come tomorrow. Our projects were designed for 15-20 years. Any changes in conditions are a disaster," he said, commenting on the idea of zeroing export duty on oil paired with a sharp increase of mineral extraction tax.

At the same time, Economic Development Minister Alexey Ulyukayev said earlier that at the moment tere are no decisions on zeroing export duty on oil. "There is a schedule in the framework of the tax maneuver on a gradual decrease. I think that's all we have," Ulyukayev said.

Earlier Vedomosti daily reported that zeroing export taxes is among the options of acceleration of the tax maneuver. The maneuver includes increasing the mineral extraction tax (this year - 857 rubles per tonne, in 2017 - 919 rubles per tonne) while reducing the export duty - up to 30% in 2017 from the current 42%.

Stabilization of oil production in 2016 - only thing that can positively affect market 

According to the official, the decision to stabilize oil production at the level of January 2016 is the only thing that can positively affect the market.

"I think this is the only thing that can stabilize the market. In fact, I talked about it last year, but underestimated the favorable investment climate in the United States, when even the company that is trading at 5-6 cents per dollar receives funding again," he said.

Speaking of oil prices, Fedun noted that he changed his mind. "I used to wish for $80-100 per barrel, but now I understand the situation better. The main thing is not the price, but volatility. The fundamental error of the cartel was that the prices were very stable, and there was a temptation to invest in mega-projects with high cost," he explained.

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