Russia, which faces flagging oil output, should cut its oil taxes to encourage companies to invest in new projects, the head of the energy watchdog for oil consuming nations said Wednesday.
Russia, the world's second-largest crude exporter, could help boost global oil and gas supplies by easing its current tax regime, said Nobuo Tanaka, executive director of the International Energy Agency, on the sidelines of the World Petroleum Congress in Madrid.
Russian oil companies have long said that the current tax regime makes it almost impossible to invest in new projects, notably in undeveloped Eastern Siberia which is believed to hold great potential.
The Russian government has proposed easing the tax burden on development in Western Siberia, which is already well-developed.
Russian oil production has started to stagnate recently after almost 10 years of constant growth. Crude production declined 1% on the year in June, signaling a possible first annual drop since 1998, according to the government.
Tanaka said Russia and other energy-rich ex-Soviet countries should do more to attract international oil companies, "whose expertise and technology are needed by the national oil companies."
He said he believes international oil companies won't be squeezed out of energy projects in Russia and Kazakhstan despite growing resource nationalism.
He said Russia, like many other fast-growing emerging economies, should do more to save energy.
Russia's energy consumption per unit of gross domestic product is one of the largest among industrialized nations.