Tuesday, May 27, 2008

Russia Cuts Taxes for Oil Companies

The beginning of the end of resource nationalism, defeated by capital's refusal to invest and the resulting production decline?
But where is the guarantee that the money saved through tax cuts will actually go to investment into oil production?

1 comment:

Anonymous said...

http://www.eia.doe.gov/emeu/cabs/Russia/pdf.pdf provides a concise overview of the russian energy industry, to include anticipated reforms of the tax code. According to the report, there do appear to be incentives to invest in underproducing fields, Eastern
Siberia (which will require significant capital investment prior to profitable yields), and in the production of cleaner burning fuels. Interestingly, the Russian electricity sector is going through its final phases of privatization, to be completed this summer, with the transmission grid remaining in state hands, and electricity generation to be controlled by the private sector. I will have to look into the details elsewhere, as it was not clear how the private/public generation/transmission partnership is to work.
marc b.