THE OIL AND GAS SECTOR IN JANUARY–AUGUST 2013

In January–August 2013, the global oil market was characterized by the persistence of high oil prices. The 2013 annual volume of crude oil production in Russia will exceed 520 million tons, hitting record high since 1990. At the same time, according to statistics, the Russian oil industry is approaching its maximum production capacity. In order to compensate for the decline in oil production at the currently exploited oil fields, Russia will have to develop new oil fields in her remote areas with insufficient or nonexistent infrastructure as well as oil deposits on the continental shelf. Russia will also have to develop the currently ignored deposits of poor quality oil situated in the areas where oil production infrastructure already exists. In order to address that problem, Russia recently adopted Federal Law No 213-FZ, containing a number of corresponding fiscal measures designed to stimulate the development of hard-to-extract oil deposits. It is also planned that the Russian State Duma will soon adopt a draft law establishing a special preferential tax regime applicable to oil production from continental shelf deposits. It is hoped that these legal acts will encourage the development of the currently unexploited huge reserves of hard-to-extract oil, thus helping Russia to maintain her present oil production level.