Russia needs to discuss again the possibility of introducing an extra oil revenue tax to halt declining output, Energy Minister Alexander Novak said on Wednesday.
“We need to return to discussion of an extra revenue tax; otherwise a decline in oil output will occur in the nearest future. Of 120 billion tons of reserves in the next 20-30 years, we’ll be able to produce only 11 billion tons,” the minister told a meeting on taxation in the oil and gas sector.
Taxation based on oil companies’ revenues rather than financial results is the sector’s key problem, the minister said.
“In the past, this practice helped avoid complexities in accounting in the sector but now it is already clear that this taxation is ineffective and deprives the sector of development stimuli,” the minister said.
