Tax decisions create good conditions for Shtokman project - Putin
MOSCOW. March 30 (Interfax) - The Russian government's tax decisions create a good environment for the development of the Shtokman gas condensate field, Prime Minister Vladimir Putin said at a meeting with Christophe de Margerie and Helge Lund, the heads of two of the project's participants, France's Total and Norway's Statoil.
"You know, we have reached several decisions on taxation right at the federal level and at the regional level - the Murmansk [regional] authorities have also passed the corresponding decisions, which create good conditions for developing Shtokman," Putin said.
The board of directors at project operator Shtokman Development AG (SDAG) on March 30 decided to delay the adoption of a final investment decision (FID) for the project by another three months. "The shareholders are confident that the project can be improved further, both technically and economically. They agreed that their efforts should continue to be focused on optimizing the project and strengthening the dialogue with the Russian authorities. They expressed their appreciation to SDAG team for their in-depth work and dedication and, reaffirming their commitment to the project, the shareholders decided to extend the Framework Agreements until July 1, 2012," the company said in a statement following the meeting.
Gazprom owns 51% of Shtokman Development, Total 25% and Statoil 24%. Gazprom, Total and Statoil signed the shareholder to form the company in February 2008. The purpose of the SPV is to finance and build infrastructure for the delivery of Shtokman gas to the shore and liquefy it under the first phase of the project. The license to the field, with reserves of 3.9 trillion cubic meters of gas, is held by Gazprom subsidiary Gazprom Dobycha Shelf.
The foreign project participants want tax breaks and Russian Energy Minister Sergei Shmatko said on March 29 that these would "definitely" be considered.
Interfax understands that the issue of tax breaks is being decided within the context of the new approach to development of offshore fields. One proposal is to eliminate or reduce all existing taxes for offshore projects in exchange for the introduction of a royalty (as a percent of revenue) and a tax on windfall profits - a completely new tax for Russia.