13:06 GMT +318 January 2018
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    Russia faces oil, gas output decline in mid term - Gref

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    MOSCOW, March 24 (RIA Novosti) - Russia may face a medium-term production decline in the industries that provide most of its budget revenues, the economic development and trade minister said Friday.

    German Gref said oil and natural gas output, which accounts for 25% of GDP and is a major source of budget revenues, had grown 7% annually in recent years, but that this growth figure was now dropping annually to 1%-2%.

    Gref said the government planned measures to develop the oil and gas industry further, including tax privileges.

    A zero rate severance tax is expected to be imposed for new deposits for up to 10 years from 2007, although the tax holiday period could be shortened if the deposit in question makes a profit. The degree of deposit depletion will be considered when differentiating the severance tax, and lower rates could be granted to fields in the final stage of development - more than 85% depleted deposits - starting from 2008.

    Gref also said output growth in the metallurgic, chemical, and timber industries, which account for an aggregate of 10% of GDP, had declined from 5%-6% to 3%-4% and urge improvements in the customs and tariff rules to deter growth decline in machine-building industry predicted at two-fold.

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