The Federation Council, the upper chamber of the Russian parliament, has approved a comprehensive tax legislation reform on shelf projects. Companies engaging offshore will be subjected to favourable tax and customs regulations, a press release from the Council reads.
For the companies engaging in new projects in the northern part of the Barents Sea, as well as the Kara Sea and the eastern part of the Russian Arctic, the extraction tax will be reduced to five percent. At the same time, the companies will get a zero-level customs tariff regime on imported goods until year 2042, RIA Novosti informs.
Also property taxes are being slashed. All shelf projects, as well as projects in inland waters, will have a zero-level property tax.
The law is first of all aimed at new projects. However, also existing projects will get benefits. Among them is Gazprom Neft’s Prirazlomnoye project, which will have a zero-level production tax.
In the southern part of the Barents Sea, a 1,3 percent production tax is introduced on all gas projects.
The new law comes as Russia’s two petroleum majors, Rosneft and Gazprom, are stepping up their bids for shelf projects. As previously reported, the new law on the Russian shelf adopted in early 2013, leaves the two state-controlled companies in a monopoly position on the shelf. According to Sergey Donskoy, the Russian Minister of Natural Resources, a total of 20 licenses to offshore projects has already been issued and another 29 license bids are currently under review.
The resource potential on the Russian Arctic shelf is alone estimated to 83 billion tons of oil equivalents, of which 80 percent are believed to be located in the Barents and Kara Seas, including the Ob and Tazov Bays, Biztass.ru reports.
