Macroeconomic evaluation of an impact that a production increase project of a large oil company may have on development of the Russian economy

• Main Authors: Valeriy A. Kryukov, Alexander O. Baranov, Victor N. Pavlov
• Format: Article
• Language: English
• Published: Georesursy Ltd. 2020-08-01
• Series: Georesursy
• Subjects: oil industry; project evaluation; multiplicative effects; ‘input-output’ method; dynamic input-output model; indirect effects; budget revenues
• Online Access: https://geors.ru/archive/article/1041/

The paper reviews an approach to systemic evaluation of projects implemented in the oil industry in connection with preferences granted for paying the resource extraction tax. The project under consideration concerns a set of solutions aimed at increased oil production by a large oil company (hereinafter the Company). The approach put forward by the authors of the paper is based on the input-output table analysis that allows demonstrating and appraising commercial effect of proposed solutions as well as tracing the full chain of inter-industry collaboration and the impact of the project on the Russian economy at large. Calculations have been made on the basis of the dynamic input-output model of the Russian economy developed at the Institute of Economics and Industrial Engineering of the Siberian Branch of the Russian Academy of Science). This approach, among other things, makes it possible to estimate those additional revenue inflows to the consolidated budget of Russian Federation that relate in particular to indirect effects from implementation of the project. An important feature of the proposed approach is consideration of dynamic economic processes that take place not only in the oil industry but also industries adjacent to it and with due regard for interaction between industries in the Russian economy as a whole.