Russia tax breaks for shale, offshore oil seen on Jan.1
* 'Tight' oil may add 2 million bpd of additional output a year
* FinMin expects tax breaks from Jan.1 2014
MOSCOW, March 18 (Reuters) - Russian tax breaks for shale and offshore oil, to unlock millions of barrels, will come in to force on Jan. 1 2014, a Finance Ministry official said on Monday.
The tight oil tax package will make Russia one of the few countries to incentivise the production of energy resources from shale and other 'tight' rock.
The package will cut the tax burden which is one of the world's highest for oil and gas production and exports and prevents investment in fracking and other expensive unconventional production technologies.
"The draft law on offshore is practically ready. This is, in effect, a special tax regime. The key point of this is scrapping export duty and a sharp reduction of mineral extraction tax," Deputy Finance Minister Sergei Shatalov told reporters on Monday.
"This will be implemented on Jan. 1 2014," he said, adding that tax relief for 'tight' oil would also be introduced around that time.
The Russian government is aiming for oil production of at least 10 million barrels per day, the world's largest, this decade. Oil and gas output brings half of state budget revenues in the energy-dependent economy.
Last year, Russian President Vladimir Putin approved a package of stimulus measures aimed at tapping huge unconventional resources of oil, which could boost Russian oil production by up to 2 million barrels per day.
Putin also flagged tax relief for companies that tap offshore oil reserves, after state-run Rosneft reached an agreement to develop Russian Arctic undersea resources with ExxonMobil. Rosneft has also signed similar deals with Eni and Statoil.
ExxonMobil also agreed to develop onshore 'tight oil' with Rosneft.
The centrepiece of the package for 'tight oil' tax relief is a sliding scale of tax breaks for investors, which would grant a discount of 50 to 100 percent on mineral extraction tax depending on the permeability of the rock.
On Friday, Russian Energy Minister Alexander Novak said an initiative to provide tax incentives for oil producers to delve into 'tight oil' reserves is being revised at the moment and will soon be sent to parliament.
Hydraulic fracturing, or fracking, which brought a boom in U.S. unconventional oil and gas output, is already in use at some fields in Western Siberia, the Soviet-era oil heartland, but has yet to open up the so-called tight oil targeted in the proposals.
The tax package must pass in order for Exxon to proceed with a drilling venture targeting Rosneft's old west Siberian fields.
"It should be discussed and sent to the lower house of parliament. I think it will be Jan. 1 (when the law will be enforced)," Shatalov said on Friday.
- Pope attacks mega-salaries and wealth gap in peace message
- Atheists face death in 13 countries, global discrimination: study
- South Africa admits mistake over 'schizophrenic' Mandela signer |
- Thai military heads agree to meet protest leader at weekend |
- Missouri executes man for killing good Samaritan motorist in 1994