Page 79 - RusRPTNov21

The estimates are up from the 2021-23 budget issued last year, in which the annual MET deduction was estimated at some RUB 50bn per year. The company underlined that its capex spending for the project was double the MET deduction at present. According to the document, the company is also going to receive a RUB 46bn/a MET deduction for the Priobskoye field in KhMAO in 2022-24 (RUB 42bn for 2021), which matches last year’s estimates.
The draft also includes a RUB 36bn (USD 0.5bn) MET deduction for Tatneft for 2021-24, related to the production of highly viscous oil, but does not include a similar tax deduction for Gazprom Neft’s Novoportovskoye field.
The tax parameters have not been changed.
To recap, the MET deduction for the Vostok Oil project envisages that the company has the opportunity to recoup some capex, conditional on Urals prices being above USD 25/bbl, for infrastructure to be commissioned before 2030, while the Priobskoye field received RUB 46bn/a fixed MET relief at oil prices above the budget rule threshold.
As of the latest earnings release, Tatneft had yet to start receiving the monthly RUB 1bn MET deduction related to HVO production (the obstacle was the absence of an exact list of expenses eligible for deduction), but we expect the company to start receiving this deduction without any further impediments.
The monthly tax relief for Gazprom Neft’s Novoportovskoye field of up to RUB 1bn was granted conditional on the Novoportovskoye field remaining an EPT field and the company concluding an investment agreement with the government. The absence of this tax relief from the budget might signify that these conditions have not been fulfilled, as the company could optimise the taxation of the field.
The Russian government approved a list of 42 strategic initiatives for socio-economic development of the country on October 7. Their aim, according to the official announcement, is “to improve people’s quality of life and make the Russian economy more modern and flexible.”
To arrive at the initiatives, five working groups analyzed 250 ideas and selected those that will respond to citizens’ real needs, provide tangible results, and further national development goals.
The initiatives are divided into six categories: technological breakthrough (15), social sphere (10), construction (7), digital transformation (5), ecology (4), and the state for citizens (1).
Each has its own focus: social sphere projects focus on healthcare; construction on improving infrastructure; ecology on waste processing and mineral resources; digital transformation on easing interactions
79 RUSSIA Country Report November 2021 www.intellinews.com