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Putin Pledges Tax Breaks for Hard-to-Recover Oilfields

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An attractive tax regime for hard-to-recover oilfields will help Russia produce an additional 40-100 million tons of crude oil annually, Prime Minister and President-elect Vladimir Putin said on Thursday.

An attractive tax regime for hard-to-recover oilfields will help Russia produce an additional 40-100 million tons of crude oil annually, Prime Minister and President-elect Vladimir Putin said on Thursday.

“It is obvious that an attractive tax regime will help accelerate the development of deposits. In the medium-term, starting from 2020, this may additionally yield 40-100 million tons of oil annually, depending on the efficiency of the operation of companies,” Putin told a meeting on measures to stimulate the development of oilfields with complex extraction conditions.

Experts estimate that Russia’s hard-to-recover oil reserves amount to 25-50 billion tons, Putin said.

The premier said Russia should give a clear signal to domestic and international companies and encourage them to work in such a complex but promising sector.

The oil extraction tax rate for hard-to-recover oil reserves will range from 0 to 50 percent of the standard rate, depending on the complexity of oilfields and these tax concessions will be in effect for five to ten years from the start of commercial production, Putin said, adding that all the documents on stimulation measures must be prepared by October 1.

 

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