Application of Flow Methods for Material and Financial Resources Management to Forecast Oil Production in Russia

  •  Aydar Tufetulov    
  •  Shamil Valitov    
  •  Amur Yartiev    


The paper considers the impact of flow methods on long-term development of oil extracting industry, the impactbeing associated with mineral resources production tax variation. Six oil production scenarios for Russia havebeen considered, comparative analysis of these scenarios is presented. By the end of the calculation period, thescenario that provides for 5% decrease of tax burden closely approximates the scenario of oil production undereffective taxation system In terms of budget receipts volumes. The scenario with mineral resources productiontax rate increase is the worst in terms of oil industry growth leading to the industry collapse. According to thisscenario, an operating company’s tax burden increases to 78%. So far, the world practice has not witnessedeconomic growth under conditions of taxes as high as this; furthermore, taxation history testifies that too hightaxes have not been paid. In terms of oil industry growth, the scenario that provides for 5% decrease of taxburden is the most credible and promising, provided the released flows are invested in production. The samelevel of tax burden decrease (5%) is required to attain oil production levels in Russia in 2018-2020s according tothe 2030 Development Strategy.

This work is licensed under a Creative Commons Attribution 4.0 License.