11.12.2008
The Shtokman Development Company wants the state to introduce tax exemption for the companies developing offshore gas fields. Among the tax benefits should be no value added tax on advanced import goods like LNG-technology, company leader Yuri Komarov says.
Mr. Komarov also proposes zero-taxes on shelf gas and condensate extraction, as well as on exports of LNG, newspaper Vedomosti reports with reference to Interfax.

All recommendations have been sent to the Federation Council and will also be sent to government. The ministries of Finance, Economy and Industry and Trade have not yet got acquainted with the proposals, ministry spokesmen told Vedomosti.

The proposed tax cuts might well be an absolute necessity for Gazprom. Mr. Komarov earlier this week said that the Shtokman project will be profitable only with oil prices of 50-60 USD per barrel. The current world financial crisis has already brought the prices below that border.

Offshore drilling is highly expensive and Gazprom and its Shtokman partners Total and StatoilHydro might all have to strain their financial capacities in the Barents Sea project. As many as up to 72 wells are planned drilled in the project by year 2030. With estimated costs per well amounting to 100 million USD and leasing of equipment costing about 400.000 USD per day that brings the Shtokman drilling costs alone to as much as 5.6-7.2 billion USD, Vedomosti reports.

In addition, the Shtokman field is only one of several major offshore fields, which are planned developed over the next decades. Gazprom is the owner of most of them.

A spokesman from the Ministry of Finance says to Vedomosti that Russia currently has not export tax on LNG and that taxes on offshore gas fields from before are on a low level.

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