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Today's paper. Last Updated: 06/01/2012

Oil Export Regulations Await Details

Russia has still not decided how to regulate oil exports next year when existing quotas and licenses are abolished, the head of one of the country's biggest oil conglomerates said Wednesday.


The issue is of key importance as the World Bank and International Monetary Fund have linked further credits to Russia to the liberalization of oil exports.


"There is still no final decision but the government is looking at an option for regulating deliveries of crude oil and refined oil products to the domestic and export markets," said Anatoly Sivak, president of Sidanko.


Deputy Foreign Economic Relations Minister Andrei Dogayev was quoted as saying a new oil export system had been "definitively agreed" and would be approved within the next day or two.


Sivak told a news conference that crude oil producers might have to supply up to 69 to 70 percent of output to domestic refineries in order to gain the right to export the remaining 30 to 31 percent. Russian refineries might have to supply up to 65 percent to domestic consumers to receive rights to export 35 percent.


"I want to stress that this document has not yet been issued, but such a system is being planned," Sivak said.


Sivak said the proposed new system, aimed at preventing a stampede to more lucrative export markets, might function well if it was applied fairly and producers were allowed to export equal percentages of their total output.


"If it is the same for everyone, then there will be some order, but today this order is being very seriously violated ... There's one company which has priority and which is being granted more export rights," he said.


Sivak said Sidanko, the Siberian-Far Eastern Oil Company, exported 10 to 11 percent of its output this year. "Another company, I don't want to name it, exported 16.5 percent."


The Sidanko chief also favored abolishing the special exporter system which excludes many producers from engaging in foreign trade operations.


"There should be a free market. We must all have the same rights and freedoms. Logic states that those who produce something should be able to sell it," he said.




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