Russia’s Oil and Gas Sector in 2013

Oil and gas comprise the main sector of the Russian economy that continues to play a key role in shaping the state budget revenues and the balance of trade. In 2013, against the background of continuing high global prices for oil and gas, petroleum production in Russia reached its highest level since 1990, and the export of oil and petroleum products reached a historic high. However, there was then a slowdown in petroleum production and a worsening of conditions for its production. In 2013, in order to create appropriate conditions for the further development of the oil and gas sector legislative solutions were adopted involving tax incentives for the development of resources where oil recovery was difficult, the differentiation of gas production taxation and the application of a special tax regime for deposits being developed on the continental shelf, together with a liberalisation of the export of liquefied natural gas (LNG)?