ASSESSMENT OF RUSSIA'S OIL RESERVES TO INCREASE UPON STUDY BY OIL-PRODUCING GIANTS - EXPERTS

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MOSCOW, May 17 (RIA Novosti) - The assessment of Russia's oil reserves will increase upon their thorough study by the largest oil-producing companies, believe experts polled by RIA Novosti.

In their opinion, it is now hard to determine the actual reserves of hydrocarbons in Russia because of the lack of full information from the large Russian oil companies - Yukos, Sibneft, Surgutneftegaz, Gazprom, Rosneft.

"Assessments made by different sources differ very much. In my view, the figure set by the World Bank is most precise - about 90 billion barrels of oil," believes Alexander Razuvayev, leading analyst of Megatrustoil.

In his opinion, completion of the property-forming process of Russian companies will let them focus on production and get a more precise assessment of their reserves.

"In our estimate, the earnings of five main companies on auction (Lukoil, Yukos, Surgutneftegaz, Sibneft, Tatneft) were about 60 billion dollars last year and will exceed 65 billion dollars this year," Razuvayev noted.

He believes that additional profits from oil exports should go to compensate the easing of the tax burden on other economic sectors. "Then the shareholders of Russian oil companies will get indirect benefits from the growth of liquidity of the national share market and increase the sovereign credit rating of our country," Razuvayev noted.

In his opinion, the distribution of oil profits is optimal with account for the tax innovations. "The stabilization fund may not be built up but the state expenditure increased by encouraging the domestic demand," he said.

Maxim Shein, chief of the analytical sector of the company Brokercreditservice, believes that the reserves of oil in Russia today are estimated at 60 billion barrels.

"We can catch up with, say, Saudi Arabia only if the reserves of natural gas are added and capital investments in the search and development of new deposits are greatly increased," Shein notes. "In my view, not so much the volume of reserves is important as the cost of their development. It is clear that the cost of production in the Middle East is incomparable with Russia's." The geography and structure of reserves also matter, he said. "Small isolated reserves in Russia are certainly secondary to concentrated fields in the Middle East," the expert added.

Shein also believes that Russia has not reached the maximal level of oil production but is approaching it, for which investments in the development of new fields are required. "Smaller and smaller deposits are now discovered in Russia," he said.

In the opinion of Shein, the export earnings of oil companies may come up to 45 billion dollars annually. "With account for the new export duties, the additional budgetary revenues from the export of oil will come up to 3 billion dollars." Russia should make a wise use of the additional revenues from the export of oil. "They are being used in a wrong way but logically: part of them goes for current consumption, another part for creating a financial reserve. Regrettably, virtually nothing remains for capital investments. This is why the high prices for oil as before present a big risk for Russia, and simultaneously a big chance," Shein said.

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