Russia's top oil firm, Lukoil, made a rare foray into politics on Monday by urging the Kremlin to cut taxes on oil companies and make better use of the vast revenues it gets from oil. Leonid Fedun, both a vice president and a large shareholder, said taxes must come down if companies are to expand oil output, which has stagnated since hitting a post-Soviet high of 9.4 million barrels per day (bpd) in September.
"The state should decide which scenario it prefers," Fedun told a Renaissance Capital conference in Moscow. "If it wants Russian production to grow to 11 million bpd then it should ease tax pressure, for example the oil extraction tax.
"If it wants a period of moderate growth which will end with a moderate decline then it is free to change nothing." Like other Russian firms, Lukoil has kept out of politics since the authorities launched a campaign against former blue chip oil firm Yukos and its former CEO Mikhail Khodorkovsky.
Khodorkovsky is now serving nine years in jail and his firm has been crushed by a $27.5 billion tax bill, which led to the forced sale of its main operating unit.
Yukos's 18-month slide towards ruin has scared investors and contributed to massive capital flight, sparking fears that more tax claims might follow. Several other oil firms have been audited for back-taxes - including Lukoil, and some received assessments or bills, but none as big as at Yukos.
Despite Yukos's downfall, the Russian oil industry has prospered because of record high prices on the world market. Russia has taken advantage of those prices to skim off excess oil profits, saving the money in a "stabilisation fund".
The fund has now accumulated more than $33.5 billion, but Fedun said Russia is losing about $2 billion annually because of excessively conservative management of the fund.
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