Russian oil output to fall more – Lukoil tells weekly

MOSCOW (Reuters) – Russia’s oil output decline is likely to continue as its tax policy prevents oil firms from investing enough in new greenfield production, a magazine quoted the head of Russian oil major LUKOIL as saying on Monday.

Vagit Alekperov, president of LUKOIL, Russia’s second-largest oil producer and biggest private oil company, said investment is also not sufficient for maintaining output at mature fields with their hard-to-extract resources.


“Unfortunately, because of the tax policy, we have entered the phase of declining oil production because investment is not enough for launching new deposits and maintaining the existing fields,” Alekperov told Smart Money business magazine in an interview.

Russian oil companies have long urged the government to change the tax system, which has not been amended for several years despite rising costs and inflation that have squeezed profit margins.

Reuters