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Igor Sechin delivers report at “Russia Calling!” Forum

13 October 2015

Rosneft Chairman of the Management board Igor Sechin participated in a panel session “Protecting Macroeconomic Sustainability, Facilitating Economic Development” at the “Russia Calling!” Investment Forum. In his speech the Head of the Company analyzed potential impact of tax framework changes in Russia for major national companies.

According to Igor Sechin, the discussed changes to the Russian taxation system may have highly negative impact on the industry and, consequently, on state’s revenues in the future.

“Our fundamental point is that the key changes in growth models should be aligned with a stable tax system. At the present stage the tax system should be of universal nature. The difference in tax regimes for different sectors is simply inexplicable: from 1% to 82%, as it is for our company,” said Rosneft’s Head.

“The investment appeal of the industry heavily depends on predictability and sustainability of the taxation regime, especially considering the long-term investment cycles typical for our industry,” Igor Sechin added.

With regard to the issue, Chairman of Rosneft Management Board said that Russian oil companies recorded a negative cash flow in H1 2015 and emphasized that devaluation-related revenues in the oil industry are a myth. According to Igor Sechin, maintenance of oil export duties may result in production cuts by 25-30 mln tons over three years. “Current production is stable. However, these results are due to investments made over previous years. We need to maintain the investment levels of previous years,” Chairman of Rosneft Management Board said.

Igor Sechin emphasized that production costs of the Russian oil companies are among the lowest in the world, and Rosneft is the global leader in these terms with this rate amounted to USD 2.8 per barrel. Production efficiency allows the company to maintain its stable financial position and service its debt portfolio when due. The Head of Rosneft also expressed an opinion that the state’s long-term and stable tax strategy is a major factor which allows Russian companies to successfully compete for the global market share.

Information Division,
October 13, 2015