Russia against oil supplies to China across Kazakhstan at current export duty rate 08 октября 2012, 15:10
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Late October Russia’s President Vladimir Putin will meet Kazakhstan’s President Nursultan Nazarbayev to discuss exports of Russian crude to China. In particular, Russia is discontent with the KazMunaiGas Kazakh National Oil Company’s plans to boost supplies of Russian crude to China without extra export duty being paid to Russia’s state coffers, Russia’s Izvestiya newspaper reports.
According to the media, the taxation scheme currently used in Kazakhstan is legal; however, its further implementation may lead to Russia missing out on tax revenues of up to $ 1 billion a year. The Russian Government is thinking of moves to stop this practice. The Federal Tax Service of Russia has announced its readiness to enforce any taken decisions through sending its representatives to customs check points.
The publication elaborated that KazMunaiGas intends to expand capacities of the Atasu – Alashankow oil pipeline to China from the current 10 to 20 million tons a year. This was announced recently by the country’s minister of oil and gas Mr. Sauat Mynabayev at a key oil conference KIOGE.
Kazakhstan’s Vice Minister of Oil and Gas Mr. Bulat Akchulakov specified that the 2012 plan envisages pumping 2 million of Russian crude into the Atasu – Alashankow. However, according to him, the current supplies of Russian crude are behind the plan. He didn’t give details of who supplies the Russian oil, nothing that China’s CNPC is the purchaser.
This statement caused a backlash from Russia’s Transneft. The Company’s representatives told Izvestiya journalists that Transneft’s schedule of oil exports does not include any crude to be shipped to China across Kazakhstan.
A source in Transneft elaborated for Izvesiya newspaper that from the legal perspective a crude swap is not a breach of customs legislation and is seen as a way to optimize logistics schemes. However it is only after the dumping tariff for crude shipped to China was set by Kazakhstan that Russia noticed its crude being sent to China with no export duty filling in the Russia’s budget.
In this context, it isn’t ruled out that withdrawal of Russia’s claims to swap schemes in exchange for higher tariffs for crude shipped to China may be a subject on the two president’s agenda, according to Izvesiya newspaper.