UPDATE 2: Russian government yet to approve tax incentive for Samotlor

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SKOLKOVO/MOSCOW, Oct 17 (PRIME) -- The Russian government may adjust a bill to provide tax incentives for the Samotlor oil field, Deputy Prime Minister Arkady Dvorkovich told reporters on Tuesday.

“We have not considered the bill. A decision has not been made. There is a possibility that (the bill) may be adjusted, but the government has not considered it,” Dvorkovich said.

On October 6, the Finance Ministry and oil major Rosneft – the owner of the field – agreed to introduce a mineral extraction tax (MET) incentive for the watered oil field amounting to 35 billion rubles annually for 10 years starting from January 1, 2018.

“We should consider the topic of incentives for watered fields only in combination with the added income tax. So far, we still have questions about the added income tax, the major question concerning the list of fields in a pilot phase. Rosneft submitted its list of possible fields that fall under the tax only yesterday. We have to look at it, look at a fair distribution of incentives among companies in combination of the two mechanisms, and only then we will decide,” he said.

“Samotlor is 18 million tonnes (of oil annually). We want to make everything fair and accurate.”

RBC business daily reported that CEOs of Lukoil, Surgutneftegas, and Gazprom Neft asked Prime Minister Dmitry Medvedev to provide other Russian watered oil fields with tax incentives in addition to the Samotlor field.

Energy Minister Alexander Novak told PRIME that the ministry supports introduction of tax incentives for watered oil fields.

“We have always supported introduction of incentives for watered fields, we said we should do it. We even developed a bill under a government ruling. Our efficiency in developing these fields is low, and we have to change taxation in the industry as it has no adequate investment,” he said.

“We have to introduce a taxation system with a tax on financial results. We have developed a corresponding bill and coordinated it with the Finance Ministry, and we hope that the government will consider it very soon,” Novak said.

Deputy Prime Minister Arkady Dvorkovich said in an interview with Rossiya 24 television channel that Russian oil companies and ministries are actively discussing systems of tax incentives in the oil sector, including the added income tax and MET incentives for watered fields, and may agree in two or three weeks.

(57.0861 rubles – U.S. $1)

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