Rosneft CEO blasts high taxes, Rosneft's H1 earnings are up 27% year-on-year

Rosneft, Russia's biggest oil producer, said that its net income for the first half of this year rose by 27% compared to last year. Sales also increased. Company chief Igor Sechin referred to rising taxes as "destructive".

The revenue for the period January to June was 5.174 trillion roubles. This is an increase of 33.4% compared to the previous year.

Rosneft is responsible for 40% of Russia’s oil production. It managed to divert sales to India and China, away from Europe. The U.S., along with Europe, introduced trade sanctions on Russia because of the conflict in Ukraine.

The Russian government has increased a wide variety of taxes to fill the state coffers as it expects budget expenditures to rise this year.

Sechin, a close ally of Vladimir Putin, stated in a press release that "the continued growth of the tax burden is having a negative effect on the oil sector." Sechin also criticised central bank interest rates.

He said that the tax burden on the oil industry has reached 75% between 2019 and 2023. This compares to 27% for the banking sector, and 62% for gas production.

He said that the tax burden was "destroying the economic model" of the industry and violating the rights of shareholders. Rosneft has over 1.3 million individual shareholders.

The company claimed to be Russia's biggest taxpayer after contributing 2.8 trillion Rubbles in taxes during the first half of this year.

Rosneft said its oil and condensate production reached 92.8 million tons (3.796 million barrels a day) in the first six months of this year. This is down from the 4 million barrels bpd that was reported for the same period last year.

The company claimed it was bound by the agreement Russia made with the Organization of Petroleum Exporting Countries (OPEC) and its allies to curb oil production to support the oil market.

(source: Reuters)