Rosneft Chief Executive Igor Sechin spoke at the St. Petersburg International Economic Forum, addressing how high tax burdens and elevated interest rates influence Russia’s oil sector. He highlighted that the industry is organized to weather these pressures and can mobilize the resources and technology needed to respond to challenges. Sechin asserted that the oil industry in Russia has a robust internal base, with capabilities that allow it to navigate obstacles and maintain steady operation even in a difficult macroeconomic climate. (Source: Rosneft communications)
According to Sechin, the economic environment is shaped by several pivotal factors. He cited voluntary production restrictions under the OPEC+ framework and intensified sanctions, including Western price caps on Russian oil, as well as limits on the use of Western financial systems and logistics. These external constraints, he argued, create practical hurdles for the industry while testing its resilience and adaptability. (Source: Rosneft communications)
He also noted that domestic factors contribute to the sector’s performance. In his view, high taxation remains a significant constraint that affects investment decisions and long-term planning within Russia’s oil enterprises. (Source: Rosneft communications)
Sechin emphasized that the sector contributes substantial revenue to the national budget, with tax collections forming a large portion of fiscal results. He pointed to a tax burden averaging around three quarters of these results, underscoring the government’s reliance on oil sector taxation as a key revenue stream. (Source: Rosneft communications)
The Rosneft chairman drew attention to the financing environment, highlighting that exceptionally high loan costs and limited liquidity in the domestic market can hamper energy projects. He noted that even in a context of abundant liquidity within the banking system, access to financing for oil-related initiatives remains constrained. (Source: Rosneft communications)
Sechin explained that the high returns on deposits, estimated around 18 to 19 percent, can deter broader investment in the real economy. He suggested that while savings attract money, the resulting prioritization of short-term gains over long-term productive investments may hinder sustainable development. (Source: Rosneft communications)
Throughout the discussion, Sechin portrayed the Russian oil sector as capable of absorbing shocks from both global markets and domestic policy, provided it maintains structural flexibility and continues to leverage domestic strengths. He argued that the industry could align with national economic goals by balancing fiscal policy with investment incentives, all while adapting to international trading patterns and regulatory changes. (Source: Rosneft communications)
In summarizing the outlook, Sechin stressed the importance of maintaining a stable investment climate that supports large-scale projects, technological innovation, and efficiency gains. He suggested that such measures would help sustain Russia’s role in global energy markets while sustaining domestic economic growth and budget stability. (Source: Rosneft communications)
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