Russia: Oil Firms Producing at Loss Due to Lower Crude Prices

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A Russian company shipping crude from the Siberian city of Nizhnevartovsk would post an operating loss of $13 per barrel after costs and taxes are taken into account, analysts Dmitry Lukashov and Maria Radina said a note to investors.

"Every company in Russia is losing money on crude oil export deliveries or crude oil domestic deliveries," Lukashov said later by telephone. "If you don't have a refinery, you're losing money."

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Oil companies currently pay $85.10 per barrel in export duties and extraction taxes alone, the analysts said. The price of crude at Primorsk fell to about $85.70 on Tuesday, after port charges are included, according to UBS.

"For the first time in the history of the Russian oil industry, a remarkable threshold has been achieved — Russian oil producers are transferring everything they get from customers for crude oil exports to the budget," Lukashov and Radina wrote in the research note.

The export tax is set to fall to $485.80 per ton ($66.30 per barrel) on Oct. 1 from $495.90 currently.

http://www.themoscowtimes.com/article/1009/42/370992.htm