Prime Minister Putin Primes the Pump

摘要

On June 11, the International Energy Agency announced that Russia's oil production had hit 9.5 million barrels per day in the first quarter, edging past Saudi Arabia's 9.2 million to make the country the global King of Crude. But few in Russia are cheering because that new crown is already wobbling. After climbing for years, Russia's output has begun to drop: It was down by 0.7% in April. The problem is so serious that the new Prime Minister, former President Vladimir Putin, has said the issue is his first priority.rnTo get production growing again, Putin has pledged billions of dollars in tax cuts for the industry. The biggest change is a lower tax on production, which would result in an extra $4 billion in oil company coffers each year. An additional $3 billion in benefits would come from tax holidays of up to 15 years for major projects in remote regions. In late June, the Parliament is expected to approve both adjustments, which would take effect next year. Oil "was so obviously overtaxed that they had to do something," says Ronald P. Smith, head of research at Alfa-Bank in Moscow.