Russian federal revenue from oil and natural gas production has declined significantly in response to low oil prices. However, Russian oil and natural gas companies’ capital investment programs have been less affected, if at all. Russia’s two main hydrocarbon taxes are calculated by formulas that result in lower tax rates at lower crude oil prices. As oil prices fall, petroleum companies retain a larger share of revenue, but government revenues from oil and natural gas production fall even faster than prices. In 2015, the Brent crude oil price, measured in U.S. dollars per barrel, declined by 47% versus 2014, and the price for the first half of 2016 is down an additional 31% versus the first half of 2015. Because of changes in the exchange rate, the decline in the Brent price as measured in Russian rubles […]