The Energy Ministry says the country's oil sector needs $230 billion of investment – or extraction of oil will drop by one-fifth by 2020.
While Russia maintains its position as the world’s largest oil producer, the country’s estimated reserves rank only seventh in the world.
“At first sight, it seems that Russia can boast vast capacities as far as energy is concerned,” the industry's draft long-term strategy reads. “However, if we take into account conformability ratios, it is clear that the country has no more that 25 per cent of its resources remaining to be extracted.”
Alarmed by the risky trend, the Energy Ministry has come up with an alternative plan for developing the sector.
For the next ten years, officials say, there are two possible scenarios the industry can stick to.
The first one, leaving things as they are, focuses on getting “maximum incomes in the current economic environment” which will inevitably lead to a drop in extraction by 2020.
The second one involves a major sector overhaul, including a shift to a different taxation regime, higher investments and changes in extraction rates. This, however, will result in much better extraction figures: in ten years, it will go up by 6.3 per cent.
To achieve this, the industry will have to differentiate taxes for old and new deposits, raising the burden for the first ones but lowering it for the latter – since the price of such scenario will amount to 7.2 trillion rubles.
Until 2020, the Ministry does not plan to carry out any new projects concerning extraction or transportation. Stabilization and growth will be maintained with the help of old deposits operating since Soviet times. New deposits are needed to maintain stability after 2020.
Economists question the idea, saying that the project is still too raw and needs further calculations.
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