RusEnergy

ST. PETERSBURG, October 4 (RIA Novosti - Northwest, Olga Vtorova) - The head of Russia's Federal Anti-Monopoly Service told reporters Tuesday that the country's current tax system would eventually ruin domestic oil companies. "What is happening now is economic poaching," said Igor Artemyev, now in St. Petersburg for a conference-cum-seminar on competition in the financial services market. Artemyev said 20,000 oil wells had been closed down in Russia over the current rate of severance tax, a tax charged by the state on natural resources, which he said should be differentiated and not tied to global prices. A source in Russia's Economic Development and Trade Ministry said Tuesday that the ministry would offer severance tax differentiation proposals before the end of this week. Tax rates can vary depending on the age of deposits and oil quality. The source said severance tax on oil extracted from new, as well as worked-out, deposits could be lower. The possibility of reducing tax on low quality oil is also being reviewed. Economic Development Minister German Gref said experts were drafting proposals on severance tax differentiation in order to encourage the development of new deposits and curb domestic oil product prices. Artemyev also noted the lack of competition on the energy resources market, which, he said nurtures corruption. He urged the emergence of energy stock markets, which, he said, would reduce opportunities for corruption.