Page 14 - FSUOGM Week 06 2021

FSUOGM POLICY FSUOGM

Rosneft scores up to $6.1bn in tax

breaks at Priobskoye oilfield

RUSSIA RUSSIA’S state oil producer Rosneft has signed much as RUB3.83bn ($51mn) per month and up
an investment deal worth up to RUB46bn to RUB460bn ($6.1bn) over the ten-year period.
Priobskoye is a ($617mn) annually with the country’s natural The deal will enable Rosneft to expand drill-
Soviet-era field in resources ministry, covering incentives at the ing and increase tax revenues for the budget by
Russia's oil heartland of large but mature Priobskoye oilfield in Western raising output, the company said. It has pledged
Khanty-Mansiysk. Siberia. to recover an extra 70mn tonnes (513mn barrels)
Priobskoye is a Soviet-era field in Russia’s oil of oil from the field by 2030. It expects this in
heartland of Khanty-Mansiysk. It was discov- turn to result in over RUB500bn extra tax reve-
ered in 1982 and started production six years nues in the form of MET and export duty.
later. Output peaked at 33.8mn tonnes (679,000 “The budget impact turns to be positive in
barrels per day) in 2009 and has been declining 2021 already due to the incentives provided,”
ever since, dropping to 480,000 bpd in 2019. Rosneft said.
Even so, it still accounts for roughly 5% of Rus- The company pointed to Priobskoye’s impor-
sia’s national oil output. tance for the Russian economy. It estimated that
Rosneft's tax breaks at Priobskoye received for every ruble it invests thanks to the tax breaks,
initial approval late last year, following a sweep- there will be a 9.3 ruble economic gain.
ing overhaul of Russian oil taxation. Most other “The intensive development of the Pri-
Russian oil producers lost out as a result of the obskoye field will help to maintain Russia’s
changes, but Rosneft came out on top. leadership on the crude oil market, create tech-
In a stock filing on February 6, Rosneft said nologically advanced workplaces, and give a new
it had secured a deduction in mineral extraction impetus to the development of the whole com-
tax (MET) at Priobskoye. The amount is cal- plex of production and service industries,” the
culated according to oil prices but can reach as company said. ™

Russia proposes privatising

gas distribution assets

RUSSIA RUSSIA’S energy ministry has prepared a bill the Far East, where many households rely on
that would enable the privatisation of gas distri- canisters of liquefied petroleum gas (LPG) for
These gas supply bution assets, responding to a request of state- their heating needs. Power plants meanwhile
facilities and owned Gazprom, Deputy Energy Minister Pavel mainly run on coal and hydroelectric power.
infrastructure cost the Sorokin said at a Federal Council meeting on Gazprom has also suggested that the govern-
federal budget a lot to February 8. ment reduce the tax burden of gas distributors,
maintain. These gas supply facilities and infrastructure in particular the tax they pay when connecting
cost the federal budget a lot to maintain and a new house to the grid. They currently pay
repairs, the minister explained. The government RUB22,000 ($297) per house, but Gazprom
wants to transfer them to owners capable of wants to reduce this to RUB3,000. This would
maintaining them instead. likely also make the distribution firms more
“A draft federal law making amendments attractive to private investors.
to the law of privatisation of state and munici- Russia wants to increase the share of the pop-
pal assets in the area of gas distribution and gas ulation with access to gas from the current 70%
consumption networks has been prepared and to 83% by 2030, by laying thousands of km of
sent to the federal executive authorities,” Sorokin new pipelines. Gazprom is not expected to fund
said. the significant expense on its own, although
The bill was prepared as part of a RUB1.9 tril- the government is yet to decide on a means of
lion ($25bn) regional gasification programme reimbursing the company. Analysts believes the
that will run for the next ten years. Russia wants programme is unlikely to affect Gazprom’s divi-
to increase gas use in order to cut heating bills dend payments to the government, or its overall
and reduce emissions in coal-dependent cities. level of spending, which is calculated based on
The least gasified areas of Russia are Siberia and conservative forecasts for operating cash flow. ™

P14 www. NEWSBASE .com Week 06 10•February•2021