Deputy Energy Secretary Bill White, who is co-hosting a high-profile conference on Russia's oil sector with Russian Fuel and Energy Minister Yury Shafranik this week, told journalists that expected changes in Russia's energy legislation "will be a real test of the maturity of the legal framework of the Russian system."
White said he hoped the participants in the four-day conference, mostly U.S. and Russian officials and business executives, would agree on a list of recommended improvements in energy legislation. This list could should include taxation based on profit rather than revenue, equal pipeline access for foreign companies based on regular bidding, and predictable production-sharing agreements, he said.
White praised Russia for offering exemptions on a crippling export tax on crude oil to six joint ventures, and urged the government to offer similar breaks to another eight companies. The six joint ventures include Conoco's Polar Lights and the KomiArcticOil venture of British Gas and Gulf Canada, which held up investments until the $5-per-barrel tax was removed in September.
White also called for privatization of the Russian oil pipeline monopoly Transneft, which he said can only attract foreign investment to replace its outdated and leaking pipeline network in return for a share in the company.
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