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Answers of the President of Republic Bashkortostan Murtaza Rahimov to questions of Neftegaz.RU

The Major component of our national economy is the fuel, energy and oil-and-gas complex. In 2000 this sector of the economy has provided more than 78 % of export entries, more than half of the industrial output volume, 56% of tax returns, more than 60 percent of capital investments. There are more than 50 percent of the basic industrial and production funds concentrated here and over 1/5 workers occupied in the industry of the republic.

What are the prospects of development of oil-and-gas branch of Republic Bashkortostan? How does the Government of republic support oil-and-gas branch?
The Major component of our national economy is the fuel, energy and oil-and-gas complex. In 2000 this sector of the economy has provided more than 78 % of export entries, more than half of the industrial output volume, 56% of tax returns, more than 60 percent of capital investments. There are more than 50 percent of the basic industrial and production funds concentrated here and over 1/5 workers occupied in the industry of the republic. Taking into account a special role of fuel, energy and oil-and-gas sectors of economy, the Government of the Republic pays steadfast attention to the formation of precise strategy of its functioning. From the very beginning of reforms we have chosen a way of an effective utilization of available potential of branches' complex, realization of a rational structural policy, activisation of investment and innovational activity, increase of the production efficiency. Objective necessity for development priorities realization and complex problem-solving is the State influence on the formation of the civilized petroleum market and economic mutual relation among its subjects and the State. Formation of an effective market system is supported by realization of the authorized Decree of President from February, 4, 2000 of the intermediate Term program of structural reorganization of economy in which one of the central places is given to reforming of the enterprises. The basic actions concerning investment activity in oil-and-gas sector of the Republic were included in the federal Program of social and economic development of Republic Bashkortostan till 2006. Even in the most difficult years due to state support which was expressed in tax privileges, we managed to do without disorder of oil-extracting and oil refining branches. Prospects of the oil-and-gas industry in the republic are quite good. The results of work of oil and gas extraction industry for 10 months 2001 show positive tendencies which were seen in the last year. One of primary goals of branch - restraint of rates of falling of an oil recovery on territories of republic and increase of extraction volumes behind its limits- is solved quite successfully. Extraction Rate Reduction was 1,7 percents. These are the lowest rates of falling for last 10 years. "Bashneft'" successfully cooperates with other regions, especially with Western Siberia, volumes of oil extracting are increasing there. The oil output forces "Bashneft'" outside republic has increased by 37,8 percents. We use set of the newest methods of oil layers increase, however in process of operation of petroleum deposits - obvious law of petroleum industry development - results an exhaustion of stocks in necessity of the decision of raw problems by import of raw material from other regions. The raw problem is most important for an oil-and-gas complex now. Having designed capacities on oil refining more than 40 million tons per one year, we participate in development and operation of petroleum deposits in other regions, we conclude the intergovernmental agreements concerning questions of deliveries in republic of hydro carbonic raw material, and also the agreement with other petroleum companies ("Lukoil", TNK, "Sibur" and others). The decision of raw problems is promoted by system of mutual deliveries of hydro carbonic raw material to the enterprises of an oil-and-gas industry. The President confirmed the list of deliveries of the scarcest kinds of raw material. Mutual deliveries list of oil and gas production industry with the next (Republic Tatarstan, the Chelyabinsk area) and other regions (Krasnodar territory) are developed. Thus, we use the best efforts to restraint of rates of falling of an oil recovery, growth of loading of oil refining capacities. The enterprises of the industry feel constant support of the republic management.
Bashheft is one of the leading Russian oil companies. What are the relations between "Bashneft" and the Government of Republic Bashkortostan? How would you comment further integration of the enterprises in state holding " Bashkir fuel company " which is going to supervise all process of extraction in republic, processings and sales of petroleum?
Yes, the fuel and energy industry of Republic Bashkortostan takes an appreciable place in Russia: its share is 8 percents, including: in an oil recovery - 4 percents, in initial oil refining - 13 percents, in manufacture of automobile gasoline - 15 percents. According to the magazine "Expert" ranking (research covered 200 enterprises of Russia, the twenty of the largest included 9 enterprises of Republic Bashkortostan, including "Bashneftechim" JSC (17 place), "Bashneft'" (18 place). It is marked above, that relations of the Government and oilmen of republic are built on the principles providing all-round development of the enterprises. Efficiency of functioning of oil-and-gas sector of economy of Bashkortostan in many respects defines economic potential of the whole republic, a standard of living of its population. With the purpose to increase the management efficiency by the state ownership in joint-stock companies on the basis of the enterprises of the oil refining and oil-extracting industry ("Bashneftechim" JSC, "Bashneft'") "The Bashkir fuel company " which included also the enterprises on energy, pipeline transport of petroleum and mineral oil is created. Correctness of the accepted decision on creation of " the Bashkir fuel company " is confirmed with the achieved industrial and financial and economic results: growth of volumes and a deepening of oil refining, increase of release of mineral oil, stability of financial and economic results of activity of the company. It substantially influences stability of economy of republic.
What is the State tax stimulation of petroleum company "Bashneft"?
The tax Policy in branches needs a serious discussion. An existing fiscal policy, excessive press federal taxes render negative influence, first of all, on an investment climate in branches of thermal power station. The tax policy, unfortunately, does not take into account features of development of the oil and gas extraction enterprises maintaining deposits, development taking place at a finishing stage. After the new Tax code issue the Government of republic has lost levers of tax stimulation. Now our oilmen have no privileges. "Bashneft'", as well as other companies engaged in development of low resources deposits with hard to recover residual stocks of petroleum, hope for change of the rate of the tax to an oil recovery. The appropriate studies of this question are now conducted and we wait, that the rate (which is taking into account a degree of clarity of stocks of petroleum) will be established. Recently republic the delegation of the Main state legal management of the President of the Russian Federation which purpose of work is optimization of the taxation of extraction, has visited petroleum and mineral oil objects. Our enterprises have stated the offers on perfection of size and structure of tax payments, perfection of processes of resources use. We hope, that our offers will be taken into account.
The Republic is the large consumer of gas. What would you wished to Gazprom JSC on ten-trillionth cubic metre of gas extraction on Yamal in December, 2001?
Republic Bashkortostan provided with gas more than on 80 percents. We basically use natural gas. We always had kind relations with Gazprom, and we decide even the most difficult problems together. Now, for example, it is necessary for us to solve the problemof gas increase in Republic Bashkortostan in 2002 up to 16,2 billion cubic metre that will provide normal functioning the industrial enterprises and housing and communal services of republic. It is sure, that we shall find mutual understanding here. Such a serious partner like Gazprom, is very important for us, we are sincerely glad for its successes, intimately we congratulate all the workers with significant event and we wish high industrial achievements, creative successes and continuation of our mutually advantageous cooperation.

Source : Neftegaz.RU