Publication: Monitor Volume: 3 Issue: 195

Formally, Russia abolished all oil export quotas and duties — at the insistence of the IMF — in July, 1996. In practice, because the Russian government continues to ration access to pipelines, a de facto quota system is still in operation. The new allocations for oil export access in the fourth quarter of 1997 have now been published. On average Russia’s 18 or so major oil corporations will be allowed to export only 27 percent of the oil they produce. (Kommersant-daily, October 17)

The right to export is a crucial privilege, since foreign buyers pay cash on delivery, while Russian domestic producers rarely pay cash, instead offering barter goods or paper securities of one sort or another. However, some firms turn out to be more equal than others in the allocation of pipeline quotas. Rosneft is allowed to export 52 percent of its oil — reportedly as compensation for the debts of its subsidiary, Purneftegaz, which must pay back a World Bank loan. Nobel Oil, a joint venture between the Komi oil company and the Swiss-based Glencore, can export 60 percent of its output. This is thought to be a political pay-off to the powerful president of the Komi Republic, Yury Spiridonov, who is up for re-election at the end of November. Volgademinoil, a joint venture between a German company and the Volgograd based Nizhnevolzhsk oil company, can export 100 percent of its output — a concession to the German government, which is anxious to help out the Volga Germans.

In addition to these broad rules governing pipeline access, the government also allocates the rights to export some 14 million tons of oil (12 percent of total oil exports) to certain firms under its federal purchasing programs. According to First Deputy Fuel and Energy Minister Sergei Kirienko, these quotas have been allotted to firms in return for their promises to pay off federal tax arrears. (Delovoi mir, October 15)

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