September 5, 2019 / 12:03 AM / 12 days ago

Russian energy minister says incentives needed for Arctic oil development

FILE PHOTO: Russian Energy Minister Alexander Novak attends a session of the St. Petersburg International Economic Forum (SPIEF), Russia June 6, 2019. REUTERS/Maxim Shemetov/File Photo

VLADIVOSTOK, Russia (Reuters) - Russian Energy Minister Alexander Novak on Thursday said the country should implement measures to stimulate oil development in the Arctic, including through tax relief and cheap loans.

Russian authorities have said they support allowing private oil and gas investors to work on the Arctic shelf, which is currently only exploited by state-controlled Gazprom and Rosneft.

Speaking at a panel at an economic forum in the Russian far eastern city of Vladivostok, Novak said Russia’s tax system was not creating the necessary incentives for investments in Arctic energy.

“We think that the tax system needs to be corrected for there to be better conditions for production,” he said.

Novak said the Russian government was considering possible tax breaks and lower-priced loans for investors in Russia’s Arctic oil and gas industry.

Russia has been eager to further explore its Arctic oil and gas reserves as its reserves in western Siberia are diminishing.

Novak added that the country could increase investments in the energy sector by 40% by 2024.

Reporting by Vladimir Soldatkin and Gabrielle Tétrault-Farber; Editing by Kenneth Maxwell

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