Vedomosti
Russia's oil curse: One-third of Russian oil projects unprofitable
Putin and key figures in Russia's oil industry face up to the harsh reality: the country's oil economy is set to become increasingly "high maintenance."
The figures speak for themselves. Putin told a videoconference of Russian oil majors that it will take over $280 billion of investment and tax incentives to keep oil production stable at 10 million bpd.
Until recently, Russia had no separate oil sector development plan. Oil producers' only guide was the general energy strategy through 2030, which urged them to boost production to 525 million metric tons per year by 2020.
However, recent assessments compiled with a new draft oil strategy in view suggest that new initiatives are needed if Russia is to produce over 505 tons (slightly over 10 million bpd): a paltry 2.2% above 2009 levels. Expected production will also be "around 500 million tons," this year, said Deputy Prime Minister and "energy tsar" Igor Sechin.
An industry in search of a plan
Putin told the conference of Russian oil majors convened to consider a new draft strategy for the sector up to 2020, that current production levels could be maintained "for several decades," but only provided there is an increase in known reserves, new oilfields are developed and yields enhanced at old deposits. "This will be enough to meet the needs of the domestic economy and to sustain exports," he added.
Current development plans for the industry require 8.6 trillion rubles (over $280 billion) in investment before 2020 as well as measures to streamline taxation. "Oil and natural gas make up a critical part of our budget revenues, so the Ministry of Finance and the Ministry of Energy must strike a careful, healthy balance - the golden mean - between oil companies' demand for investments and stable budget revenues," Putin said citing the positive impact of these decisions. For example, drastic cuts in mineral extraction taxes on depleted fields have spurred oil production in the Volga area.
The prime minister mentioned a taxation scheme to help minimize initial costs. On achieving peak yields, the company will up its tax contribution accordingly. Later, when the field is nearing depletion, taxes can be lowered again.
Under the current tax system, 30% of the country's oil projects are unprofitable, Energy Minister Sergei Shmatko noted.
An ideal balance
The previous draft oil strategy included two scenarios - a basic one envisaging declining production and the preservation of today's tax system and an upgraded version involving tax reforms, investments of 7.2 trillion rubles and production boosted to 547 tons per year.
Shmatko said that even output of 500-505 million tons would help the country strike an ideal balance between what the budget needs and what's in the best interests of the sector.
Higher growth requires even greater investment. However, Shmatko noted that further growth would still be possible after 2020, as long as innovative technology is used to enhance recovery at old fields and that new projects are commissioned.
Vremya Novostei
Russian historians re-write Ukrainian history
A Russian version of Ukraine's history goes on sale next year. Historians in both countries hope that by agreeing a common past they can forge a shared future.
Alexander Chubaryan, Director of the Russian Academy of Sciences' World History Institute and Member of the Presidential Commission to Counter Attempts to Falsify History to the Detriment of Russia's Interests, said his colleagues were keen to put forward their perspective on Ukrainian history and that work on the manuscript was already complete.
Chubaryan hopes this project will help the two nations avoid inter-state scandals in politics and academia, because it comprises work by Ukrainian and Russian historians alike.
A Ukrainian-language edition of "Essays on Russian History" and a Russian-language version of "Essays on Ukrainian History" have been published in Kiev and Moscow.
Hot topics in a disputed past
Chubaryan said he had not yet read the Russian book on Ukrainian history, but that he hopes it will not come under heavy fire from his Ukrainian colleagues.
He said Russian and Ukrainian historians disagreed on the significance and consequences of the 1654 Treaty of Pereyaslav, when Cossack Hetman Bohdan Khmelnytsky and his troops pledged allegiance to the Russian Tsar.
The Russian revolution of October 1917 is another divisive chapter of history, with opinions especially split over the "national movements."
A joint Russian-Ukrainian history textbook for schools will follow, Chubaryan noted.
Ukraine's Minister of Education and Science Dmytro Tabachnyk echoed this sentiment on Wednesday during Prime Minister Vladimir Putin's visit to the country.
He said the humanitarian cooperation subcommittee of the bilateral inter-state commission backed setting up a historians' working group to work on the textbook.
Russian-Ukrainian relations have thawed following the election of President Viktor Yanukovych, which makes consensus on disputable historical issues more of a possibility.
However, if that noble aim is to be accomplished, textbooks need to change, said Russian Minister of Education and Science Sergei Fursenko.
Moving beyond history
There is the mutual sense that this Russia-Ukraine relationship "reset" should reach beyond history: expert groups on mathematics and the natural sciences are to follow.
In April 2010, the Kazakh capital Astana hosted the first congress of teachers and education officials from post-Soviet republics.
Addressing the congress, Belarusian Deputy Education Minister Kazimir Farino, said a common CIS history textbook should be reasonable and concise, while also reflecting the republics' distinctive features.
Chubaryan said the Association of CIS History Institutes' Directors had discussed the need for a common textbook on the history of the 1941-1945 Great Patriotic War, but that the project had proved too complex. Instead, a "general post-Soviet" textbook for teachers on the subject would be published, he noted.
The Ukrainian opposition Yulia Tymoshenko Bloc slammed the idea of the Russian-Ukrainian textbook. Her supporters issued a statement saying that textbooks were an internal Ukrainian matter and that Ukrainian academics did not need any foreign assistance. Going further, the statement denounced Tabachnyk as notoriously anti-Ukrainian, and the book as "written to our neighbor's diktat."
Vremya Novostei
VAT to plug pensions gap?
Countries the world over are struggling with massive pension shortfalls. Now, one Russian official has found a radical new way of plugging the gap: redirecting VAT revenue into the pensions abyss.
It seems too good to be true. Re-assign a proportion of the revenue raised through VAT to the Russian Pension Fund, while not even considering any VAT increase. That's the solution proposed by State Secretary and Deputy Minister of Health and Social Development Yuri Voronin.
The business community backs the proposal as a healthy alternative to increasing the Pension Fund insurance premiums from 2011, Voronin said, also seeking to allay fears that this approach could spawn "grey" salary schemes.
Tighter state control over pension funds needed
A range of different proposals are under consideration, and Voronin's novel idea is, for the moment, only one of many. But all agree on one key need: to tighten state control over private pension funds and increase their responsibility before their clients.
None of these initiatives will affect the changes in the pension laws due to take effect in 2011, such as the increase in the premium rate from 20% to 26%, the increase of taxable annual earnings from the current 415 to 463 thousand rubles, and the increase in the range of persons covered by compulsory pension insurance.
Those measures will not eliminate the deficit endemic in the pension system - that amounts to 0,8% of GDP.
Cuts on the horizon
The Ministry of Health is considering its options. Benefits currently enjoyed under the compulsory pension insurance system will be gradually reduced. By 2015, a single contribution rate will essentially apply across the board.
Even benefits accorded the much-loved Skolkovo Innovation Center will not outlive 2020, Voronin says. Those on fixed premiums, including entrepreneurs, lawyers, and even private detectives, can expect higher premiums or the replacement of the compulsory system with a voluntary alternative, Voronin explained.
To date not a single plan has garnered universal support. The Health Ministry rejects Central Bank First Deputy Chairman Alexei Ulyukayev's initiative of tying the annual pension indexation to the inflation rate. Voronin explained they feared lest this lead to a conflict between new and old pensioners, as the former would be in a noticeably better position.
The Ministry is also considering raising the retirement age. But instead of raising the age Voronin proposes increasing the required number of years worked to get the highest pension rate.
This year's buzzword - modernization - is liberally used throughout the Ministry of Health report, specifically in regard to the insurance component, which Voronin blames for the need to increase premium rates from 2011.
One option would be to slash the savings component while simultaneously increasing that of distribution - as has been tried in Eastern Europe. Low-earners stand to benefit.
Voronin concluded by emphasizing that it was not the state's role to make up for losses incurred by private pension funds through incompetence or venality.
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MOSCOW, October 29 (RIA Novosti)
