LUKOIL President: Russia Oil Production to Fall After 2011

June 16, 2010
The production of oil and gas will begin a steady decline in Russia after 2011 if legislation is not changed to stimulate geological and seismic surveys, said LUKOIL President Vagit Alekperov, the chair of the Russian Union of Industrialists and Entrepreneurs' (RUIE) energy committee.
"Production will achieve a maximum in 2010-2011 and then begin a steady fall, because there is no stimulus for investment in the sector, he said during a meeting of the RUIE bureau of management.
Alekperov noted that investments in geological surveys were down 65 percent this year and stressed this was not due to the world financial crisis. He said reasons for the drop included the fact that fields which are discovered are handed over to the government and not to the subsoil user who discovered the field. Alekperov added that money spent on discovering a field are only recouped if the exploration is a success. He said that in his opinion, legislation needs to be drafted which would allow the necessary raw materials base to be created which would provide for stable oil and gas production, RIA Novosti reports.
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