Russia's Oil Sector To Call For 10-15 Billion-dollar Investment In 2001-2005

For the stabilisation and development of the Russian oil sector in 2001 through 2005 between 10 and 15 billion dollars of investment will be required, the Russian energy and economic development ministries have calculated. Their calculations were discussed at a collegium of the Audit Chamber on Monday. It considered results of a check of the condition and development of the Russian oil complex in 1998-2000 and its impact on forming the federal budget. Auditors believe that adoption of the federal law On the Tax Regime of Production from Low-Yield Wells will allow to increase the annual yield by 20-25 million tonnes, RIA Novosti was told at the Chamber's press service. As to cancellation of goal-oriented deductions on the reproduction of the minerals-raw materials base, this may lead to the curtailment of geological prospecting, rejection of search for highly efficient reserves and tapping of new oil and gas provinces. According to materials submitted to the collegium of the Audit Chamber, in a matter of 10-15 years the bulk of profitable reserves of oil will be depleted and the level of production may subside by the year 2005. The collegium stressed that a stabilisation has been observed in the oil complex since 1999. In 2000 oil enterprises produced 232.3 million tonnes, or 17.9 million tonnes /5.5 percent/ more than in 1999. Participants in the collegium sitting made a special note that corporative prices of oil have a negative effect on the pricing policy. Oil companies set prices below the current prices on the domestic market, which leads to the lowering of the level of profitableness, earning capacity and also the taxable base of oil producing enterprises.