Sibneft Choked By Tax Bills

Russian number 5 oil producer Sibneft yesterday revealed the figures of it profits, which dropped by 10% last year because of a large tax bill.

The company made a net profit of $2.05bn last year, down from $2.28bn the previous year. The result was also below analyst forecasts of $2.33bn. Sales rose 32% to $8.9bn. The company increased its provision for tax fivefold last year to $875m, after a Russian government crackdown on tax minimisation.

As a result of changes to the tax law, Sibneft went from a 7% tax rate in 2003 to 30% last year.