The Russian government does not plan to greatly increase taxation on oil companies, Prime Minister Mikhail Kasyanov told State Duma deputies. Extra revenue received when the price of oil exceeds $25 per barrel could be subject to withdrawal, said the prime minister. "How the tax system works needs to looked at, especially the price parameter," he said.

If money is not earned through increased output efficiency it could be withdrawn by the budget. The level of taxation in Russia's oil companies is about the same as for their counterparts in developed countries, Kasyanov said.

"Taxation in Russia is lower than in Norway, but higher than in Britain and the same as in the United States." The government could reduce taxes for companies that develop fields that are no longer efficient.

In some cases ecologists say that work at a field should continue even if production efficiency has gone down, he said. For such fields, tax may be corrected to support the oil companies. The technology appearing in the next 10-15 years should enable production to be improved even at fields that are classed as having low efficiency.

(Interfax 16.i.04)