PRESS: Rosneft CEO asks for 2.6 tln rbl of Arctic tax exemptions

MOSCOW, Jul 15 (PRIME) -- Igor Sechin, CEO of Russian state-owned oil major Rosneft, has asked President Vladimir Putin for 2.6 trillion rubles of tax exemptions for Rosneft’s Arctic projects, where it may invest over 5 trillion rubles, Vedomosti business daily reported on Monday quoting Sechin’s letter to Putin.

Four officials, two sources close to regional oil and gas companies, and one of possible participant of the Arctic projects confirmed the authenticity of the letter to Vedomosti.

In his letter, Sechin asks Putin to support a bill on development of the Arctic zone written by the Far East Development Ministry, which offers a special tax regime for investors. Sechin also describes Vostok Oil, a new project that should unite the fields of Eduard Khudainatov’s Nefetgazkholding and Rosneft, and says that the project includes “first-class international investors” but does not name them.

Under the projects, Rosneft will build 5,500 kilometers of pipelines, sea terminals with transshipment capacities of up to 100 million tonnes a year, airports, and power transmission lines, the business daily reported.

Calculations of KPMG, as quoted by Vedomosti, say that potential investment stands at 8.5 trillion rubles, while one of the possible participants of the project said that capital expenditures may even exceed 8.5 trillion rubles if reserves of all the fields under the project – including the Lodochnoye, Tagulskoye, Vankor, and Payakha fields – reach their prospective levels.

Contribution of the project to Russia’s gross domestic product (GDP) may amount to 2% a year until 2050, while the budget wins 4.4 trillion rubles in taxes and dividends. There will also be a synergy impact on related industries, the business daily reported quoting data of KPMG.

Two Vedomosti’s sources said that Putin ordered Prime Minister Dmitry Medvedev to study Sechin’s request and report on it. Putin’s spokesman Dmitry Peskov declined to comment. Prime minister’s spokesman Oleg Osipov did not provide a comment, while Rosneft, Neftegazkholding, the Energy Ministry, KPMG, the Far East Development Ministry, and Deputy Prime Minister Dmitry Kozak declined to comment.

(63.0204 rubles – U.S. $1)

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