* Russian parliament to discuss tight oil bill
* Experts says metering costs outweigh benefits
* Russia needs tight oil development to sustain production
By Vladimir Soldatkin
MOSCOW, June 26 Steps to stimulate extraction of
hard-to-recover oil in Russia, vital to sustain output in the
world's largest crude producer, could be stymied by onerous
costs of measuring output, experts and a key member of
parliament told Reuters on Wednesday.
The debate over tax relief for unconventional oil comes as
Moscow tries to join the shale revolution led by the United
States, which has overtaken Russia to become the world's top gas
producer and ramped up output of oil in recent years.
Russian producers have already reported 500 million tonnes,
or 3.5 billion barrels, of recoverable reserves of 'tight' oil
in the shale of Siberia's Bazhenov formation.
Yet that is just a fraction of Russia's 75 billion barrels
in recoverable resources of shale oil which the U.S. Energy
Information Administration estimates are larger than the 58
billion barrels held by the United States.
The Russian government has worked out proposals to nullify
mineral extraction tax for Bazhenov starting from January 2014
and cut the rate for other unconventional oil, including the
"easiest" Tyumen formation.
But the positive effect could come to naught if costly and
cumbersome measures proposed by the Finance Ministry, aimed at
better control over tight oil production, are introduced by
2016, as the ministry suggested.
"The worst (of the proposals) is the system of direct
separate metering of oil. For many companies related costs to
the system may offset tax relief," Ivan Grachev, the head of the
energy committee in the State Duma, Russia's lower house of
parliament, told Reuters after the committee approved the bill.
He said the draft law will be sent to Duma for discussions
in the first reading when the necessary amendments will be
debated. The Finance Ministry declined immediate comments.
Much studied but largely untapped, Russian tight oil,
including Bazhenov - which the International Energy Agency
describes as the world's largest source rock - lies in
impenetrable black clay beneath existing oilfields covering most
of West Siberia.
Without steps to spur tight oil output, Russia may miss its
target of producing at least 10 million barrels of oil per day
this decade and lose substantial amount of budget revenues.
Tight oil development is also crucial for Russia's top crude
producer, Rosneft, to stick to its commitment of more
than doubling its oil supplies to China over the next 25 years.
Rosneft and U.S. Exxon Mobil last year struck an
alliance to assess tight oil reserves at the Bazhenov and
Achimov formations in Western Siberia.
It's a partnership that some analysts say could reach
commercial production sooner than the Arctic and Black Sea
offshore projects the two are tackling.
Denis Borisov, a director at accounting firm Ernst & Young,
which advises the Energy Ministry on tax policy, said the steps
to set up measuring infrastructure would hinder development of
Russia's unconventional oil reserves.
"One of the key conditions for the practical implementation
of tax benefits, which stimulate the development of
hard-to-recover oil, is scrapping the direct separate
measurement requirements," he said.
On a separate bill, aimed at increasing excise taxes for
high-grade fuel, the energy committee voted against the