Page 89 - RusRPTFeb22

China is to sell oil from its strategic reserves on the market from 31 January to 6 February in order to reduce oil prices as part of a plan agreed by the United States with other major oil consumers. China has agreed to sell oil in relatively large volumes if oil prices are above USD 85/bbl, and a smaller volume if oil remains at USD 75/bbl. In November 2021, the United States, along with other major oil importers, announced the sale of about 70mnbbl of oil from strategic reserves on the market in the coming months. Analysts treat the news as neutral since the announcement of the sale of oil from strategic reserves by major oil importers at the end of November did not lead to a noticeable decrease in oil prices (dated Brent eventually rose above the levels of the end of November, from USD 82.32/bbl to USD 87.32/bbl at present), so we believe that this will not affect OPEC's plans of a monthly production increase of 400kbbl/d until May 2021 In December, major oil importers had reserves of about 1,000mnbbl, which corresponds to 6.5% of the annual production of OPEC+ countries, based on the level of OPEC+ production in December 2021.
The excess profit tax (EPT) regime might be expanded to cover 27 new licence areas in Komi, YaNAO and KhMAO, Vedomosti reports. The respective amendment to the Tax Code was prepared by State Duma deputies together with the ministries of Energy and Finance. New areas with hard to recover (depleted and highly viscous) reserves might be included into the third (from 2023) and fourth (from 2022) EPT groups. The amendment aims to incentivise production from reserves that are not commercially attractive under the standard tax regime. MinFin estimates that this could bring an additional RUB 84bn of government tax revenues in 2023-27. No revenue shortfall is envisaged. The government is to provide an assessment of the draft document by mid-January. Preliminarily, MinFin has considered areas with 80mnt of reserves (72mnt – candidates for inclusion into group 4).
Russia will produce 10.1 million barrels of oil per day in January
under the OPEC+ deal, Deputy Prime Minister Alexander Novak told reporters on the sidelines of the Gaidar Forum.
The demand for gasoline and diesel fuel in Russia this year is going to exceed the pre-pandemic 2019 level, Kommersant reports. According to Ministry of Energy statistics, gasoline shipments to the domestic market reached 33.3mnt in 11mo21, which is 1.5mnt, or 4.7%, higher than in the same period of 2019. Diesel fuel supplies increased to 35.9mnt (up 1.4mnt, or 4%, from the same period in 2019). Demand for fuel is growing against the background of increasing retail prices. On 29 November, gasoline and diesel fuel at gas stations had risen in price by an average of 8.5% YTD.
89 RUSSIA Country Report February 2022 www.intellinews.com