Bloomberg News

Russia May Refund Tatneft, Bashneft Over Oil Tax Losses

October 04, 2011

(Adds new tax details in third paragraph.)

Oct. 4 (Bloomberg) -- Russia may reimburse OAO Tatneft and OAO Bashneft for revenue lost as a result of the so-called 60-66 oil tax measure, Deputy Finance Minister Sergei Shatalov told reporters today in Moscow.

The oil companies may be compensated for 100 percent of their losses from next year through to 2015, Shatalov said. The compensation will be in the form of discounts to the mineral extraction tax, he said.

Russia plans to introduce the 60-66 tax measure to spur investment in production of crude and quality fuels from Oct. 1. Levies will rise for heavy products such as fuel oil and will fall for light products such as diesel.

Bashneft, which refines more oil than it produces, stands to lose out from the tax adjustment. Tatneft, the oil producer based in Russia’s Tatarstan region, said last year it may spend as much as 290 billion rubles ($8.8 billion) building Russia’s first new major refinery since the fall of the Soviet Union.

The 60-66 formula lowers the crude export tax, using a coefficient of 60 percent instead of 65 percent, while taxing exports of all refined products at 66 percent of the crude levy.

--Editors: Stephen Cunningham, Amanda Jordan.

To contact the reporter on this story: Scott Rose in Moscow at

To contact the editor responsible for this story: Balazs Penz at

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