According to the plan, which is expected to be approved by government before year’s end, the Arctic project operators will be offered a set of benefits which is to facilitate their investments in the complex region.
A copy of the plan has been obtained by newspaper RBK Daily.
Several ministries, as well as the companies Gazprom, Rosneft and Lukoil are reported to be involved in the process with the plan, the newspaper writes.
The list of measures not only includes the introduction of a zero-tax on oil, LNG and condensate export and on import of equipment and technology, but also significant other tax benefits. Among these will be an adjusted production tax, as well as tax on exploration. The companies will not have to pay property tax. In addition, a zero-VAT rule will be introduced both on export operations and on goods and services. Also the system of royalties is likely to be changed, and harmonized with international standards.
The new regulations come after the companies with shelf licenses have pushed hard for enhanced benefits. Current regulations applying to land operations will not make the far more complex and expensive shelf operations profitable, the companies argue.
As BarentsObserver has reported, Statoil are among the foreign partner companies, which has been most outspoken about the need for offshore tax benefits. Top company representative in Russia Jan Helge Skogen recently stressed that “tax breaks are urgently required if a final investment decision in the Shtokman project is to be made before the end of the year as planned”.
After several postponements, the final investment decision on the giant project in the Barents Sea is now to be announced before the end of 2011. Company head Helge Lund recently told newspaper Dagens Næringsliv that this decision is “one of the hardest decisions I have ever faced”. –It will be a big decision, both if it is a “yes” or a “no”, he underlines.
Read also: Shtokman discussions in Moscow
However, also other foreign companies are pushing for facilitated tax conditions. Among them is the ExxonMobil company which is facing major investments in the Kara Sea.
Read also: Tax breaks for the Kara Sea
