Offshore tax breaks detailed by Putin

Some of the big winners from the new rules and tax breaks (such as the removal of export duty) outlined by Putin on Thursday include Exxon Mobil and Rosneft, who have formed a partnership for operations in the Arctic and the foreign members of the Shtokman gas project who have delayed their final investment decision repeatedly due to economic concerns.

Putin has been quoted as saying that, “the long term goal is to secure Russia’s leadership on the global energy markets.” The move comes as Russia faces something of an uncertain for demand of its energy resources as the US shale boom continues and as many other nations begin to scour their own territory for shale hydrocarbons, seeking independence from external sources. The U.S., for example, has set a target of becoming a net exporter of LNG by 2016 with an initial output of 1.1 billion ft³ per day, which is set to double after three years.

Putin estimated that over the next 30 years the approximately 100 billion tonnes of oil equivalent available in Russia’s offshore reserves is likely to attract something in the region of US$ 500 billion of investment.

Although analysts have lauded Putin’s move, some such as, Andrey Polishchuk, of Raiffeisenbank have stated that more needs to be done to support foreign companies, “If we are going to ramp up oil and gas production quickly … other companies should be allowed to bid for offshore tenders. Lukoil has always complained that it fails to obtain access to a big field in Russia.”

Edited from various sources by David Bizley

Read the article online at: https://www.lngindustry.com/liquid-natural-gas/13042012/putin_reveals_long_awaited_tax_breaks/