Page 8 - FSUOGM Week 28 2019

FSUOGM POLICY FSUOGM
Rosneft head seeks $41bn in Arctic tax breaks
Some of the projects that could receive tax breaks are already in production.
RUSSIA
ROSNEFT’S in uential head Igor Sechin has reportedly o ered to help realise Russia’s ambi- tious goals for increasing cargo traffic along the Northern Sea Route (NSR), in return for generous tax breaks at the company’s Arctic oil projects.
e NSR runs along Russia’s northern coast and is expected to become an increasingly via- ble passage for trade between Europe and Asia as Arctic ice recedes because of global warm- ing. Moscow sees the route’s development as a national priority, with government o cials set- ting out plans earlier this year to expand cargo trade to 92.6mn tonnes by 2024, up from 20.2mn tonnes in 2018 and less than half that volume in 2017.
In a meeting in April with President Vladimir Putin, Sechin said a new cluster of oil elds it is developing in the Arctic could provide up to 100mn tonnes per year (2mn barrels per day) of oil for shipment along the NSR by 2030. Ros- ne is asking for large tax incentives in return, sources told Vedomosti on July 9.
According to the newspaper, the cluster comprises Rosne ’s Tagulskoye, Suzunskoye and Lodochnoye oil elds, located in the north- west of the Krasnoyarsk region, as well as the Paiyakhskoye further north, which is operated by private group Neftegazholding (NGH).
In his April meeting with Putin, Sechin also referred to the giant Vankorskoye eld, which has been producing oil since 2009, as part of the project.
Tagulskoye, Suzunskoye and Lodochnoye are also already in production. Rumours that Rosne and NGH are seeking to develop Pai- yakhskoye jointly have been circulating for some time, although the pair are yet to o cially announce a partnership. NGH, which is headed by a former Rosne president Eduard Khudain- atov, is suspected of already having close busi- ness ties with the state oil company.
Rosne and NGH want the Russian state to fund construction of a new pipeline and port, in order for these projects to export their crude via the NSR, Vedomosti reported. e compa- nies have also asked for a reduction in mineral extraction tax (MET) and other incentives, the newspaper’s sources claimed, adding that the government is looking into such support measures.
In a second report on July 14, Vedomosti said Sechin had requested in a recent letter to Putin a total of RUB2.6tn ($41bn) in tax breaks.
Responding to speculation about Moscow’s position, Putin’s spokesman Dmitry Peskov told reporters on July 15 that no decisions had been taken on such incentives.™
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w w w . N E W S B A S E . c o m Week 28 17•July•2019