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23Mar16

Русский

Russia oil production costs $2 per barrel

Russia's Deputy Minister for Energy Kirill Molodtsov said that the cost of oil production in Russia makes up $2 per barrel.

In an interview with the Rossiyskaya Gazeta newspaper, Molodtsov noted that the cost of the production of tight oil, as well as the production on the shelf is evaluated at $20 per barrel.

According to the official, in 2016, the total volume of investments in the oil industry will remain at last year's level at around 1.4 trillion rubles. "The industry feels confident, and our companies do not to cut investment programs. Taking into account the tax burden, they may change, of course, but they remain roughly at the level of 2015 when it comes to numbers," the official said.

In January, Deputy Minister for Energy Alexey Teksler said that the cost of oil production in Russia made up $3-6 per barrel and up to $15-16 given transportation and drilling costs. The official noted that Russia would have to make difficult budget decisions, if oil prices fall to $20 per barrel due to lower tax revenues from the oil and gas industry.

Earlier, the Central Bank of the Russian Federation revealed details of a new stress scenario of the economic development, in which Urals oil would cost $25 per barrel during 2016-2018. The scenario stipulates for the preservation of economic sanctions against Russia until 2018, a decrease of GDP by two to three percent in 2016 and the inflation rate above seven percent for the end of this year.

The Russian Central Bank also downgraded its core economic development forecast and fully abandoned the optimistic scenario.

[Source: Pravda, Moscow, 23Mar16]
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