UPDATE 1-Russia oil tax cut offer won't meet sector hopes-min

By Denis Dyomkin and Vladimir Soldatkin

DUSHANBE/MOSCOW, Aug 29 (Reuters) - Russian Energy Minister Sergei Shmatko said on Friday his staff would soon present new proposals on oil tax cuts to the government, although they would be much smaller than oil companies had hoped for.

"I think we will submit proposals on additional tax cuts for oil companies, maybe as soon as in August but definitely before the end of the year," Shmatko told reporters.

"But they (the proposals) are far from that figure," Shmatko added, referring to Thursday's statement by the head of LUKOIL (LKOH.MM) Vagit Alekperov, who said oil companies needed 400 billion roubles ($16.30 billion) in oil benefits in 2009.

The 400 billion rouble figure reflects industry-wide hopes for tax reductions in the next year, Alekperov said.

The Russian government has approved tax breaks for new fields in East Siberia, Timan Pechora and Yamal -- regions rich in resources but lacking infrastructure -- and is considering extending them to cover other areas.

Starting next year, it will cut the mineral extraction tax for all producers. The amendment to the tax code raises the tax-free threshold on extraction to $15 per barrel from $9.

LUKOIL's vice-president Leonid Fedun said on Friday that the company, Russia's second biggest producer, believed further steps to ease the tax burden should include increasing the threshhold to $25 from $15.

Fedun said the tax benefits that have already been cleared, will allow LUKOIL to save $24-27 billion in 2009-2017, including $2.6-$2.9 billion in 2009 alone.

"These changes allow LUKOIL and other companies to speak with confidence that their investment plans will be met," Fedun told a briefing.

Oil output in Russia, the world's largest exporter after Saudi Arabia, fell in the first half of the year for the first time in a decade.

Stagnant Russian production has been a concern for the government which depends heavily on oil revenues, as well as for global oil markets in the past year. The International Energy Agency warns supply will fail to keep up with demand in the long term. (Writing by Tanya Mosolova, editing by Anthony Barker)