OBSERVATIONS ON THE REORGANIZATION OF THE RUSSIAN OIL INDUSTRY

A Norwegian energy economist, and a Russian academician/advisor to the Tyumen' Oblast government, both long-time analysts of the former Soviet and now Russian oil industry, survey major developments, trends, and implications of ongoing reorganization in the oil sector. Key aspects in the assessment of the sector are the presence of market-based vs. administrative incentives and measures in the day-to-day operations of new organizational structures, the tension between elevating efficiency (profitability) and full employment and services provision (and between decentralization/recentralization), and government pricing and taxation policy featuring various deductions from oil-sector revenues into the Federation budget. Implications of current developments for revenue generation in the oil sector are analyzed.