Oil Sector : Potential for Tax Incentives

The state of Russia's oil sector is marked by a general deterioration of the oil extraction conditions owing to depletion of existing deposits in developed regions and significantly higher extraction costs at the new oil fields and tight oil deposits. In order to improve the situation, investments in the development of new oil fields are required as well as in deepened development of existing deposits with an improved refining margin. Government fiscal policy should contribute to the resolution of these issues including implementation of structural reform in the tax system and introduction of special excess-profit tax