Oil companies lose $68 per metric ton of exports
Alexander Tutushkin, Irina Malkova
Prices of WTI crude fell below $44 per barrel yesterday, while Urals crude plunged to below $41. Prime Minister Vladimir Putin said the oil companies' losses per metric ton of exports totalled $68, and promised to help them out.
Putin mentions the oil companies' losses when answering questions in a televised Q & A session. "Today we have lowered the tax burden on the oil and gas sector, but the burden remains considerable. The oil companies are sustaining losses because global prices have fallen, and also because taxes remain high," he said as quoted by Interfax.
The figure cited by the Prime Minister was calculated at the Energy Ministry based on the price of Urals crude, $44 per barrel on November 20 (see the Table). Analysts say the price is adequate, but oil prices have fallen since then, to $41 yesterday (although it gained 60 cents by evening).
Konstantin Cherepanov from KIT Finance said current oil company losses exceed $89 per metric ton.
Putin said yesterday that assistance was on the way. According to a source from the Government Office, the heads of major companies yesterday discussed "stabilisation measures in the oil sector" with First Deputy Prime Minister Igor Shuvalov at a meeting attended by Deputy Prime Minister Igor Sechin, who met with the oil managers the day before.
They discussed "administrative and financial measures" of assistance to the sector, including lower taxes, although no practical decisions were made, the source said.
The oil companies were pressing for lower taxes, export duties and the mineral production tax, said an employee of one of the top five oil companies.
They said that otherwise they would have to cut their 2009 investment programmes by 20-30%, said a source with close ties to one of the participants in the meeting.
A week ago, the Government refused to slash the export duty on oil, which is now $192.1 per metric ton. Denis Borisov, an analyst at the Solid investment financial company, said that a week ago the oil companies lost $0 to $21 per metric ton of oil exports, but the situation has worsened dramatically since then.
According to Borisov, if oil costs $40 per barrel, the export duty on oil will be cut to $125 on January 1. If Transneft's costs do not rise above inflation (13.5%), the oil companies' export revenues will be $2-$5 per barrel.
COMPILED BY VIKTORIA SUNKINA