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Rosneft's Arctic project will receive fewer benefits than requested - EastRussia | Far East






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Rosneft's Arctic project will receive fewer benefits than requested

Rosneft's Arctic project will receive fewer benefits than requested

The Arctic project of Rosneft and Vostok Oil will not receive the expected support from the government. The company was counting on more attractive benefits from the Ministry of Finance, so now, according to experts, the discussion between Rosneft and the government may drag on.

The project consists of two parts: the development of the Payahskoye oil field of Neftegazholding Eduard Khudainatov in Taimyr and the adjacent sections of Rosneft, as well as the redirection of oil from the Vankor cluster of Rosneft, consisting of Vankor and three new fields - Suzunsky, Tagulsky and Lodochny, to the north Taimyr through the construction of an oil pipeline about 600 km long and an offshore shipping terminal in Sever Bay.

As the Kommersant, The Ministry of Finance is ready to reduce the mineral extraction tax for the Vankor cluster by ten years, but only if the price of oil is higher than the price set in the budget rule 42 dollars per barrel. With 60 dollars per barrel, the company will receive a benefit of about 60 billion rubles a year, and only to create the basic infrastructure for transporting oil from Vankor to the north of Taimyr and further along the Northern Sea Route.

Rosneft wanted to reset the severance tax for Suzun, Tagul and Lodochny and requested a “tax deduction” from the severance tax for Vankor himself. It was about a privilege of at least 120 billion rubles a year at a price of 60-65 dollars per barrel. According to the head of the tax department of the Ministry of Finance, Alexei Sazanov, the project will receive a tax deduction from the severance tax only for the amount of investments in the Vostok Oil infrastructure and if the price of oil exceeds the budgeted rule. In this case, money can only be directed to infrastructure - pipelines, port, roads.

This summer was moratorium introduced on tax credits for new oil fields until the 2020 year. The management of Rosneft asked unprecedented measure of support in the amount of 2,6 trillion rubles. Recently it became known that the management of Rosneft and Neftegaz is considering possibility of selling up to 20% of shares Oil East project in the Arctic. Negotiations with potential investors have already taken place, but they are also waiting for the provision of benefits for the project.