Russia to provide tax breaks to small oil firms

MOSCOW Oct 19 (Reuters) - Russia's Ministry of Natural Resources on Monday proposed incentives for small private oil companies to bolster the country's crude output, which last month spiked to a record high above 10 million barrels per day.

The ministry said in a statement it sent proposals to the Finance Ministry to cut the mineral extraction tax (MET) for fields with reserves lower than 3.0 million tonnes.

Russia has already sweetened terms for all oil companies with tax breaks and lower export duties to encourage crude extraction, which along with natural gas accounts for the bulk of state budget revenues.

It also wants mothballed oil wells restarted with the help of independent servicing companies.

"Commissioning of idle low-flow wells will allow us to secure additional oil output growth by 5 to 10 million tonnes a year (about 100,000-200,000 bpd)" the ministry quoted Grigory Vygon, the head of its economics and finance department, as saying.

Russia is aiming to restore oil output growth after it fell last year for the first time in a decade. Russia's Energy Minister has said the country's oil production may rise 0.4 percent to 490 million tonnes this year.

Russia's monthly oil production exceeded 10 million bpd in September for the first time due to launch of new oilfields. [ID:nL2451607] (Reporting by Vladimir Soldatkin; Editing by James Jukwey)