Moscow has pledged to sustain its crude oil production at high levels and increase exports. However, the economic model of the Russian oil sector still seems to remain largely export-oriented, while the government seemingly views it as a major cash-cow.
The authorities have increased the oil sector’s financial burden. On November 27, Prime Minister, Vladimir Putin, signed a decree to increase export tariffs levied on crude oil and oil products. According to the decree, effective from December 1, the tariff levied on crude oil was raised from $290.60 per ton up to $308.80 per ton. Also, on November 27, President Dmitry Medvedev signed into law a bill to increase the crude oil extraction tax (Interfax, RIA Novosti, November 27). Although these increases were not significant, such measures indicated the government’s continued over-reliance on petrodollars.
Russian authorities have long prided themselves on being a major energy power. Russia’s total oil reserves are estimated at 22 billion tons, sufficient to sustain the current output levels for 40 years, Energy Minister, Sergei Shmatko, announced on October 28. Russia is expected to pump 501 million to 505 million tons of oil annually until 2020, Shmatko said. Russian oil export capacities would be increased up to 350 million tons per year by 2015, from the current level of 270 million tons, according to Shmatko (Interfax, RIA Novosti, October 28).