Russia’s oil exports to outstrip production

Sep 29, 2005 02:00 AM

Russia’s oil production will increase 3 % this year, finance minister Alexei Kudrin told an investment conference, “Investment in the Russian economy”. Over the past four years, oil output had increased by more than 40 %, he added.
Kudrin said Russia’s oil exports would increase faster than oil production in 2005. Oil exports have grown 10 % since January 1. Analysts expect a lower figure at the end of this year, but it will be higher than production growth.

The finance minister said this was due to problems with investment in the raw material industry. He welcomed foreign investment in this area but stressed that existing restrictions on foreign companies’ activities in Russia should be respected. Kudrin said the finance ministry and the central bank were completing the development of a mechanism of investing the money of the stabilization fund in foreign stocks.
He said Russia planned to invest the stabilization fund’s money in foreign government securities, and also considers investing them in corporate stocks. Kudrin said the role of the stabilization fund was very important, noting that this tool allowed the country to maintain economic growth and control projected macroeconomic indicators.

On September 14, Kudrin told the state Duma that the stabilization fund would reach RUR 1.426 tn by February 1, 2006, and it will increase by another RUR 857.5 bn by the end of next year.
RUR 40.9 bn from the fund will be spent on debt payment in 2006, and the fund will be about RUR 2.242 tn by January 1, 2007. On September 1, the stabilization fund stood at RUR 832.1 bn.

Kudrin also said that the finance ministry planned to allocate from $ 3 bn to $ 5 bn this year for early debt payment to the International Monetary Fund and the Paris Club of creditors; from $ 10 bn to $ 15 bn will be allocated for the purpose next year.
The stabilization fund was set to rise over the next few years, Kudrin said. “It will be a big money bag tempting us to spend it,” he added.

Source: RosBusinessConsulting
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