Russian oil industry wants flexible taxes, expansion of excess profit tax to tap new reserves - Gazprom Neft CEO

MOSCOW. April 2 (Interfax) - Russia's oil industry wants to see greater flexibility in the tax system and the expansion of the excess profit tax (EPT), as this would stimulate the development of new technologies and tapping of new reserves, the CEO of oil company Gazprom Neft , Alexander Dyukov said after a government strategic session on the development of the oil and coal industries.

"The oil sector is interested in increasing the flexibility of the tax system, in expanding the EPT regime. This stimulates the creation of new, even more complex technologies and involvement of new classes of reserves in development. And the development and expansion of the use of digital doubles of fields and industrial facilities will ensure complete transparency for the state of tax incentives' application," Dyukov told reporters.

He noted the importance of technological development for the oil sector. "If we continued to use the technologies that were at our disposal 20 years ago, Gazprom Neft's production would be four times lower," Dyukov said.

Technological advances enabled Russian oil companies to develop reserves that would have seemed impossible to tap just 15-20 years ago, he said. The industry, on the initiative of the government, has now created an efficient system for managing the process of developing new technologies, equipment and software, he said.

"Just as part of the work of the coordinating council under the Russian government, more than 100 types of equipment out of the 220 types of basic equipment for the industry that was not produced in Russia at the start of 2023 have already been developed. And the total industry order for this equipment now amounts to 550 billion rubles," Dyukov said.

He also said that the development of technology has enabled the Russian oil industry to steadily and reliably supply the domestic market with oil products.

"Furthermore, many of the solutions that we developed to solve our own problems have strong export potential. Other countries that produce oil are already facing or will inevitably face the same geological and technological challenges that we deal with," Dyukov said.