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Russian upstream taxation – room for manoeuvre?

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05 February 2015

Russian upstream taxation – room for manoeuvre?

Report summary

Tax changes in effect from 1 January 2015 were designed to promote modernisation of Russian refining, harmonise oil taxes in the Eurasian Economic Union, protect the oil and gas sector contribution to the Russian federal budget, and ensure development of frontier and hard-to-recover oil continues. In the low oil price environment, however, most Russian upstream companies will face higher tax payments. Only a handful of projects will benefit, most notably Gazprom’s East Siberian gas fields.

Table of contents

  • Executive Summary
    • Mechanics and upstream implications of the tax manoeuvre
    • Export oil
    • MET burden increases on fields with tax benefits
    • Export duty reduced rate remains advantageous
    • Time for the state to reap the tax benefit of condensate production
    • Gazprom secures further tax reductions for its East Siberian assets
    • Conclusions

Tables and charts

This report includes 10 images and tables including:

  • Russian upstream taxation – room for manoeuvre?: Image 1
  • Tax manoeuvre
  • Barrel breakdown for exported oil, conventional fields (Urals oil price US$60/bbl)
  • Tax burden comparison of a barrel of exported oil
  • Barrel breakdown for domestic oil, conventional fields (export oil price US$60/bbl)
  • Reduced oil MET rate comparison in 2015 (export oil price US$60/bbl)
  • Reduced export duty comparison in 2015 (export oil price US$60/bbl)
  • Reduced export duty threshold prices
  • Isolated effect of the condensate MET increase in 2015-2020 – top nine producing fields/entities
  • Isolated effect of East Siberian tax breaks for Gazprom fields

What's included

This report contains:

  • Document

    Russian upstream taxation – room for manoeuvre?

    PDF 351.61 KB

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