Tatar Oil Research and Design Institute of Tatneft Company:

A. F. Yartiev, Head of Oil Production Economics Sector, Candidate of Economic Sciences, e-mail: yartiev@tatnipi.ru

Profitability in oil industry, along with other factors (production, investments, tax burden), is determined largely by the efficiency of finance management with due account for the business particulars. A highly efficient finance management tool is a flow-based method aimed at expenses’ optimization and innovation production development.

In terms of oil production, cash flows can be reduced to earnings-flow and costs-flow. The distinctive characteristic of the subsurface user’s costs-flow is that it is to a great extent an earnings-flow for the state budget.

In case of reducing of the subsurface users’ tax burden a part of its costs-flow would become a reverse-type flow and could be invested in production development.

The analysis shows that the basis for innovative-driven development of the fuel-and-energy sector is a 5 % reduction of the tax burden accompanied by the growth of reverse-type flow investments.

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