×
Enjoying ad-free content?
Since July 1, 2024, we have disabled all ads to improve your reading experience.
This commitment costs us $10,000 a month. Your support can help us fill the gap.
Support us
Our journalism is banned in Russia. We need your help to keep providing you with the truth.

Rosneft Wants Tax Cuts For Oil Companies

The head of state-owned energy giant Rosneft has called for a large reduction in the tax burden on the oil industry, Vedomosti reported Monday, in a move that could increase friction with the government.

Kremlin heavyweight and Rosneft CEO Igor Sechin said in a presentation that oil companies' tax base should be cut from 55 percent to 35 percent to stimulate new investment and generate a windfall of up to 6 trillion rubles ($180 billion) for the state budget by 2030.

But this proposal would be unlikely to get a warm welcome from the Russian government, which faces a potential 1 trillion ruble ($30 billion) budget shortfall this year and would, therefore, be reluctant to sacrifice tax revenues, the Vedomosti report suggested.

"Considering the uneasy budget situation, we expect the proposal to run into fierce opposition from the Finance Ministry," Sberbank CIB analysts said in a research note on Monday.

There is a history of disagreement between Sechin, who oversaw Rosneft's transformation into the world's largest publicly listed energy company through its acquisition of privately-owned TNK-BP last year, and Prime Minister Dmitry Medvedev's cabinet.

Arkady Dvorkovich, who oversees the energy sector in the government, is an advocate of privatization and reduced state interference in the strategic industry.

Last week, Medvedev fired Alexander Popov, the head of Rosnedra, the agency that awards licenses to develop natural resources. Popov, who worked under Sechin when he was deputy prime minister, is considered to be a close ally of the Rosneft CEO.

… we have a small favor to ask. As you may have heard, The Moscow Times, an independent news source for over 30 years, has been unjustly branded as a "foreign agent" by the Russian government. This blatant attempt to silence our voice is a direct assault on the integrity of journalism and the values we hold dear.

We, the journalists of The Moscow Times, refuse to be silenced. Our commitment to providing accurate and unbiased reporting on Russia remains unshaken. But we need your help to continue our critical mission.

Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just $2. It's quick to set up, and you can be confident that you're making a significant impact every month by supporting open, independent journalism. Thank you.

Once
Monthly
Annual
Continue
paiment methods
Not ready to support today?
Remind me later.

Read more