Page 101 - RusRPTNov19

prepared suggestions on this matter. These include zero property and land
taxes, a 7% income tax rate (against 20%) and 7.6% insurance premiums
(against 30%) for 30 years. Tax relief for the Vankor field in the amount of
investments in the new projects was discussed as well, according to
Kommersant. The total amount of tax breaks might be some RUB2.6tn
($41bn), per the paper. MinFin has also suggested moving Arctic fields to the
EPT regime. The proposals have been preliminarily approved but are still to be
discussed and further developed, according to Novak. At the same time,
Rosneft CEO Igor Sechin held a meeting with Indian Minister of Energy
Dharmendra Pradhan to discuss potential cooperation in the Vostok Oil
project, Kommersant writes. The share of Indian investors in the project has
not been discussed yet. Absence of a final decision on tax relief for Arctic fields
remains the main obstacle in the negotiations.
Russia plans to pay more attention to the impact climate change is
having on its vast permafrost area . Thawing of once permanently-frozen
ground covering more than half of Russia is putting buildings, pipelines and
other infrastructure at risk of damage. With the Arctic warming twice as fast as
the rest of the world, that’s a big problem. The economic loss is 50bn to 150bn
rubles ($2.3bn) a year, said Alexander Krutikov, deputy minister for the Far
East and Arctic development.
According to a draft of Russia’s new Energy Strategy to 2035
seen by
Vedomosti
Russian subsoil licensing agency Rosnedra has taken an inventory of Russia’s major oilfields and found that one third of them are unprofitable to develop. Some 2,700 fields in total were assessed, with total reserves of 28.9bn tonnes (212bn barrels) of oil. Included was a survey of big fields with more than 5mn tonnes of oil, although strategic fields that are being developed under production sharing agreements were excluded. There are a total of 593 big fields that hold a total of 17.2bn tonnes (126bn barrels), but a third of them are not economically viable to develop, says Kasparov, equivalent to 5.7bn tonnes. Almost three-quarters of these unprofitable fields are located in Russia’s Urals district, which is also where more than 60% of the profitable ones are situated, he said. The energy ministry expects Russian oil production to start declining after 2022. National output edged down to 11.25mn barrels per day in September, from 11.29mn bpd in August.
Oil importers have started receiving compensation for the contaminated oil issue from the summer, Kommersant reported on October 9. Polish PKN Orlen has been partially compensated for under-delivered oil, RIA Novosti writes, citing the company’s spokesperson Ioanna Zakrevskaya. The amount of compensation and the sender were not disclosed. The full damage has not been calculated yet, and PKN Orlen, as well as Belarus, are to finalise their claims by the end of the year. According to Kommersant’s sources, Poland estimates the amount of contaminated oil exported by the country at more than 1mnt, while Transneft sees only 0.4-0.6mnt as having been damaged. The payments to Kazakhstan have been agreed upon based on 0.6mnt of contaminated oil. First, the compensation to oil exporters is to be paid by oil
, the Ministry of Energy has for the first time acknowledged
that global oil demand may start to decline after 2030. The cost of
production of Russian oil companies compares favorably with almost all
competitors outside the Middle East. But the forthcoming Energy Strategy also
presents a worrying forecast for Russian output. This is set to decline from
2021, falling from around 570m tonnes in that year to 350m tonnes in 2035.
101 RUSSIA Country Report November 2019 www.intellinews.o