The State Duma approved in the 1st reading the tax deduction to the mineral extraction tax for a number of oil fields in Ugra

The State Duma approved in the 1st reading the tax deduction to the mineral extraction tax for a number of oil fields in Ugra

The State Duma approved in the 1st reading the tax deduction to the mineral extraction tax for a number of oil fields in Ugra

MOSCOW (Reuters) – The State Duma of the Russian Federation adopted in the first reading a draft law on the deduction to the mineral extraction tax (MET) for a number of Ugra oil fields. Analysts say that the largest Russian oil company Rosneft (MCX: ROSN) is its main beneficiary.

Rosneft in Yugra is developing a large oil field – Priobskoye, which the company has been waiting for a privilege on the development since last year.

Despite the increase in taxes for the oil industry as a whole, Rosneft was able to secure some tax breaks for itself, which confirms the management's ability to negotiate with the authorities, analysts from BCS write.

Earlier on Tuesday, the State Duma in the first reading approved the revision and cancellation of benefits for the oil industry. The cancellation from next year of benefits for mature and mature oil fields, the abolition of indulgences in the production of super-viscous oil and the clarification of the tax regime should additionally bring to the treasury, according to the calculations of the Ministry of Finance, about 220 billion rubles a year.

However, according to the draft law approved in the first reading, from 2021 it is envisaged to provide a tax deduction to the MET for oil production in licensed subsoil areas located in the Khanty-Mansiysk Autonomous Okrug – Yugra, the license for the use of which was issued before January 1, 2018, and initial recoverable oil reserves of each of which are 1,000 and more million tons as of January 1, 2018.

The tax deduction is provided subject to the conclusion of an investment agreement to stimulate production. It does not indicate specific investment requirements, but it is necessary to register the planned volume of oil production for the period from January 1, 2021 to December 31, 2032.

The amount of the monthly tax deduction is 3.83 billion rubles only if the price of Urals oil in the tax period exceeds the base price of oil (in 2021 $ 43.3 per barrel). The exemption does not apply if the oil price is below the base price.

(Daria Korsunskaya, text by Olesya Astakhova. Edited by Anastasia Teterevleva)

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