Dvorkovich: Russian oil sector market oriented; state doesn't control production
MOSCOW. Jan 29 (Interfax) - Russia's oil industry is part of the private sector and the state has no direct influence over oil production volumes, Deputy Prime Minister Arkady Dvorkovich said during a press conference at Interfax's central office in Moscow.
"We proceed from the notion that the oil sector is to a significant degree part of the private sector, commercially oriented, not under direct state control. The market is regulated by the decisions of individual companies, and it will continue to be that way. Companies will proceed based on their own interests, the interests of their capitalization," he said when asked about the possibility of Russia cutting production in coordination with OPEC.
"Nonetheless, if prices are located at an excessively low level for too long, an adjustment in investment is inevitable. But this will not be a deliberate action on the part of the state and will on no account be in the interests of the state," Dvorkovich said.
"We are for the stable functioning of our oil sector," he said.
The tax system in the Russian oil sector eases the tax burden when prices for crude are low, which facilitates the stabilization of investment volumes when the market situation is unfavorable.
"The situation on the oil market is determined by many factors. The result may be unpredictable. Both economic and political factors play a great role in this process. The market in essence is self-regulating, self-adjusting under the effect of external factors and, in the final analysis, this will lead to price stabilization at a level higher than the one we are seeing today. When that happens, no one can say," Dvorkovich said.