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Putin's aide talks taxes, energy in Washington

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WASHINGTON, December 7 (RIA Novosti) - Russia could reduce taxes if the Stabilization Fund, established in 2004 to accrue surplus revenues from high world oil prices, exceeds $100 billion, a Russian presidential aide said Thursday.

"We understand that anything can happen with oil prices," Igor Shuvalov told a briefing in Washington. "But if they remain high, we will reduce taxes."

Russia's Stabilization Fund totaled almost $83.2 billion as of December 1, 2006, according to the Finance Ministry.

Shuvalov said income tax could be reduced and value added tax abolished, given the favorable situation on the world oil market

The economics ministry earlier said VAT could gradually be replaced by a sales tax in 2009-2011, as the VAT rebate on export operations involves a complicated procedure.

But the head of Russia's Central Bank, Sergei Ignatyev, was skeptical about the idea of replacing VAT with a sales tax, saying that a new tax would incur just as many administrative inconveniences.

Shuvalov also said foreign companies are welcome to take part in Russian energy giant Gazprom's ambitious Shtokman project to develop a large gas field off Russia's Arctic coast.

In October, state-run Gazprom unexpectedly announced it would proceed with the project on its own, and said none of the previously short-listed companies had proposed acceptable terms for the developing the deposit, the only source of natural gas for the Nord Stream gas pipeline, which will link Russia to Germany along the Baltic seabed.

"The Shtokman project will be developed jointly with foreign companies," Shuvalov said. "Gazprom will be the sole owner of a [development] license, but it is unable to develop the deposit alone."

Gazprom CEO Alexei Miller said earlier that foreign companies are welcome to join the Shtokman project as contractors.

Gazprom's shortlist of potential foreign partners in the lucrative Shtokman project included Norway's Statoil and Norsk Hydro, France's Total, and U.S. oil majors Chevron and ConocoPhillips.

Shuvalov said Russia plans to build 45 new nuclear reactors over the next 20 years to reduce domestic natural gas consumption in the long term.

"We plan to build 45 new nuclear reactors and 15 new-generation coal-fired plants, as well as hydropower plants. In the future, gas will be burnt only in large cities, such as Moscow and St. Petersburg," he said.

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