The Russian government should support the development of heavy crude oil deposits with tax breaks, Natural Resources Minister Yury Trutnev said on Friday.
"As for the heavy crude oil deposits, we agree with all (Tatneft's) proposals. We will work together so that (tax) differentiation for development of heavy crude oil deposits appears," Trutnev told a meeting in Tatarstan, the home base of Tatneft oil company, whose reserves are mainly high in sulphur content.
Trutnev said that light oil would one day run out, not only in Tatarstan but in the whole of Russia and companies would have to "go to deep levels, to work with heavy oils and learn to develop the shelf."
"This is expensive, and this should lead to a change in the tax burden as the current tax system is mainly designed for high-margin oil production on large deposits with good oils," he said.
"As they deteriorate, it is obvious that such margins in oil production will not be achieved. We will have to invest more, to spend more. We are sure that it is better to extract oil with less tax than not to produce it at all. Because this is gross domestic product, jobs, wages, this is the Russian economy."
Tatneft has prepared a technical and economic feasibility study for 50 heavy crude oil deposits with total reserves of 200 million tons and asked the government to support their development, which is more expensive than production of lighter oil.
There are 450 registered heavy crude oil deposits with estimated reserves of 7 billion tons in the Republic of Tatarstan. Tatneft is now developing two such deposits.
KAZAN, February 25 (RIA Novosti)
