Relief for Russian oil explorers

Companies choosing Russian-made technology are to get tax preferences.

Use of Russian-made equipment on the shelf will give tax relief, the government says.


A bill facilitating oil exploration on the shelf is in the pipeline, government sources confirm. Already in the course of summer 2015, federal ministries will start preparing a proposal on how to cut tax obligations for the oil companies, Kommersant reports.

A total of four ministries are involved in the process, which could significantly reduce taxation on oil and gas exploration for the companies, which apply Russian-made technology, equipment, services and computer programs.

The government bodies will also elaborate a new system which is to prepare the ground for the replacement of foreign equipment with domestic production, the newspaper informs.

Russian companies are currently believed to spend about ten percent of their costs on exploration activities.

As previously reported, the Russian government is also in the process of elaborating new legislation which will re-arrange the national oil and gas license regime. In the new system, more companies, including from abroad, will be invited to establish project consortia. In addition, the government wants the liceses to be split into two different part; on the one hand exploration liceses, and on the other field development and production licenses.