Govt to introduce differentiated NRET depending on oil field characteristics - Putin
NOVO-OGARYEVO. May 3 (Interfax) - Russian Prime Minister Vladimir Putin on Thursday will sign a government order introducing concessional differentiated natural resources extraction tax (NRET) rates depending on oil field characteristics, he said during a meeting dedicated to incentivizing the development of oil fields characterized by complicated production conditions and oil characteristics.
"Today I am signing a government order establishing such a work procedure. Besides that, I am asking that all the necessary documents and acts regulating the procedures for providing discounts on difficult-to-recover oil reserves be prepared by October 1 of this year," Putin said.
He added that "for analogues with shelf projects, we expect to introduce a category of difficult-to-recover oil fields - depending on the oil field characteristics, first and foremost based on permeability and viscosity indicators - and to establish a discount on the NRET for such fields."
For the most complicated projects, the NRET will be between 0% and 10% of the standard rate. For the medium category, it will be set at between 10% and 30%. For the simplest category - between 30% and 50%.
"We expect to fix such a regime in the long-term, thereby creating stable, predictable, long-term rules for business. The discount will be provided for ten, seven and five years, respectively - however, I emphasize that this will be from the start of industrial oil production," Putin said.
Such an attractive tax regime will accelerate the development of difficult-to-recover oil fields, he said. In the medium term, this could provide for an additional 40-100 million tonnes of oil production per year starting in 2020, depending on the efficiency of companies' work, he said.