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Energy

Russia govt to debate oil industry tax brakes

MOSCOW, May 19 (Reuters) - Russia’s government will on Thursday discuss the possibility of zero oil extraction duties for the Arctic region of Yamalo-Nenets as well as lower taxes for small deposits in a bid to stimulate new fields development.

Tax is a key issue for Russian oil companies, which argue that heavy levies prevents them from committing the billions of dollars needed to access the complex and remote new deposits that will ensure future production growth and replace mature deposits where output is declining. Officials will discuss “the advisability of introducing a mineral extraction duty of zero roubles for a set time period on the extraction of oil from new deposits in the north of the Yamalo-Nenets region”, the government said on its Web site, www.government.ru on Wednesday.

They will also consider the possibility of reducing the duty paid on oil from new deposits with insignificant supplies.

Russia retained its status as the world’s top oil producer in April, ahead of Saudi Arabia, but the position depends on continued growth of production from new fields in East Siberia.

East Siberian fields currently enjoy a zero export duty, although the Finance Ministry has called for the levy to be reintroduced [ID:nLDE64H142]. The new measures to be discussed by the government could partially offset any negative impact on the sector if the zero export duty is revoked.

Writing by Toni Vorobyova; Editing by Amanda Cooper

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