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11:01 GMT +3 hours20 December 2014
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Russia Frees New Shelf Projects from Export Duties Putin

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There will be no export duties for new hydrocarbon development projects on the Russian shelf, President-elect Vladimir Putin said on Thursday.

There will be no export duties for new hydrocarbon development projects on the Russian shelf, President-elect Vladimir Putin said on Thursday.

"There should be a special stimulating taxation system for shelf projects scheduled for implementation. We have made a decision to fully lift the export duty for new shelf projects," Putin said at a government meeting.

As of April the export duty for Russian oil amounts to $460.7 per ton, while discount duties for several fields in Eastern Siberia and the northern part of the Caspian Sea are $241.5 per ton.

As for other duties and taxes, they will also be low or fixed within 15 years from the date of the production launch, Putin added.

"Mineral extraction tax for the most complex Arctic projects may be nearly five percent from the prices of products sold. We also suggest lifting property tax and value added tax on unique imported equipment, which Russia does not make, for all new projects regardless of the complexity level," the prime minister said.

Implementation of the projects will allow attracting about $500 billion of direct investment into the oil and gas industry and about $300 billion in related industries in the next 30 years. Project implementation will also create up to 400,000 jobs.

"This sector will form the demand on products of shipbuilding, metallurgical and machine-building industries ... and it can create ... hundreds of thousands of new high-tech and well-paying jobs," he said.

Putin also said that the world's largest oil and gas companies might be partners of Russian firms in the shelf projects.

Under current rules, only companies with over 50 percent state ownership and no less than five years experience of working in marine exploration can develop the Russian continental shelf. Only Russian gas giant Gazprom and the country's largest oil company Rosneft currently meet these requirements.

The localization level for the projects should be no less than 70-75 percent and all participants of the projects will face "strict requirements," Putin said.