Page 12 - FSUOGM Week 44 2021

FSUOGM POLICY FSUOGM

Russia's finance ministry proposes

adding more fields to EPT regime

RUSSIA RUSSIA’S finance ministry is preparing to There is also a cap on how much extra pro-
include more fields in its excess profit tax duction can be brought under the tax regime.
There are several (EPT) regime for the oil industry, conditional This cap is 2mn tonnes per year (40,000 barrels
conditions for inclusion. on how much oil they yield, Vedomosti has per day) for fields in the third set, while no more
reported. than 300mn barrels of reserves can be included
Deputy Finance Minister Aleksey Sazanov in the fourth set.
presented the ministry’s proposal to a working “The combined production of fields that
group at the State Duma on October 29. To be might join the EPT makes up just 0.8% of 2021F
included in the EPT regime, the new fields have production, on our numbers; thus, the combined
to fit certain criteria. effect on the industry is to be limited,” analysts at
First, oil production cannot be less than was VTB Capital said in a research note on Novem-
approved by subsoil licensing agency Rosnedra ber 1.
in the project’s documentation. Second, their The finance ministry overhauled Russia’s oil
inclusion in the EPT regime must benefit the taxation system last year, abolishing various tax
government financially over the next five years cuts that had been granted to projects considered
in terms of extra tax receipts. challenging – whether because of their mature
Third, the fields have to be at least 50% state, their remote location, their geological char-
depleted to join the third group of EPT projects, acteristics or other factors. Those affected pro-
mostly consisting of brownfields. To join the jects can be transferred to the EPT system, which
fourth group, comprising greenfields in Tima- should ease their tax burden, although they will
no-Pechora, Western Siberia and south Russia, still enjoy less support than they did under the
they have to have depletion rates of 1% or lower. previous regime. ™

ENERGY TRANSITION

Rosneft announces energy transition

strategy as climate conference nears

RUSSIA RUSSIAN state oil major Rosneft is developing a polluting industries like the energy sector are
new strategy centred on the transition to renew- receiving renewed calls to commit to emissions
Sechin also said able energy resources. The move was announced reduction.
Rosneft had invested by CEO Igor Sechin at the Eurasian Economic However, Rosneft’s CEO was also at pains
more than $580mn in Forum in Verona, Vedomosti reports. to stress that oil and gas would continue to be
green energy in 2020 “We are currently developing a new company crucial sources of energy in the short term. He
alone. strategy, with the central priority of adapting to warned that renewables could never fully replace
the challenges of energy transition and integrat- fossil fuels, and pointed to Europe’s mounting gas
ing the ‘green agenda’ into our business,” said crisis as an illustration of the dangers of a hasty
Sechin at a special event for reliable energy and transition. “The energy transition process must
the global energy transition. be balanced, driven by the economy, and socially
Sechin also said that Rosneft had invested responsible. The global community must come
more than $580mn in green energy in 2020 up with a unified approach to the global climate
alone, and that it had reduced the volume of pol- problem, stimulating the development and pro-
lutants it released into the atmosphere by 14% in duction of emission reducing technologies. It
the same period. should not search for culprits and adopt unilat-
Rosneft’s announcement comes just days eral protectionist measures, which would widen
before the beginning of COP 26, the UN’s climate the already considerable gap between develop-
conference held in Glasgow, where Italy will be ing and developed countries,” Sechin said.
a co-President. As pressure builds on individual Emphasising the need for a diversified
countries to unveil ambitious net-zero strategies, energy supply, Sechin added that “only a sensible

P12 www. NEWSBASE .com Week 44 03•November•2021