Energy Ministry wants to avoid Gazprom, independent producer differentiation in new NRET formula
MOSCOW. Oct 16 (Interfax) - The Russian Energy Ministry plans to give the government its proposals on a formula for the natural resources extraction tax (NRET) on gas by the end of October, which it hopes will depart from the idea of differentiating between Gazprom and independent producers, Deputy Energy Minister Pavel Fyodorov told journalists.
The NRET for 2013 has already been established, but a formula approach is being developed for 2014-2015, he said.
The formula approach being suggested by the Energy Ministry should take into account both the conditions of the field's development, including development costs and the transport component, as well as the selling price of gas on domestic and foreign markets, Fyodorov said.
Fyodorov noted that "the approach that we are preparing departs a bit from the independent producer - Gazprom classification." He pointed out Gazprom Neft as an example, which pays twice the NRET that other oil companies pay because it is a subsidiary of Gazprom. He also indicated operators of regional gas networks, which sell gas for export.
"We are changing the approach. The NRET rate should depend on the actual price of selling," Fyodorov said, noting that the NRET will be higher if the selling price of gas is higher.
"This will be a formula approach that ensures high payments to the budget and gives companies the motivation to invest in as predictable a setting as possible," he said.
Meanwhile, the heart of the discussion at the Russian government is not expected to be about correction coefficients, but about how much money the government can extract from the gas industry, Fyodorov said.
"Obviously, the amount of money the government can withdraw from the gas industry will increase - that is fixed in the budget projections. The question is to what degree. It's important to on the one hand not look a gift horse in the mouth, but on the other, the gas industry should bring in much more than 3% of the revenue portion of the budget," he said.
The Energy Ministry has analyzed over 14 new gas projects for both Gazprom and independent producers, and it has identified the thresholds at which "the new projects will still be profitable," Fyodorov said.
Meanwhile, there is a very complicated issue regarding whether or not the global gas industry needs such a large number of new gas projects, given today's economic circumstances. "A decision needs to be made on whether to stimulate the launch of a large number of new gas projects that have marginal savings and minimal payments into the budget amid a complicated global situation," he said.
