Bashneft, Tatneft may get tax breaks on viscous oil to compensate 60/66
MOSCOW. Sept 1 (Interfax) - The Russian Energy Ministry is ready to propose a discounted natural resource extraction tax (NRET) on some of the fields owned by Bashneft and Tatneft , the two oil companies that are expected to be most adversely affected by the enactment of the 60/66 system of oil and product export duties.
The tax break would apply at fields with high-viscosity oil, Energy Minister Sergei Shmatko told journalists.
"In fact issues associated with the NRET for heavy oils are under discussion. How that will be balanced, how that will cover their [Bashneft and Tatneft's] lost earnings must be examined," Shmatko said.
The 60/66 system will take effect on October 1, 2011, under a resolution signed by Prime Minister Vladimir Putin at the end of August. It will raise the export duty on dark oil products to 66% of the export duty on crude oil from 47% currently. The export duty will remain at the 66% level for diesel fuel and at 90% for gasoline. The export duty on crude oil will itself be lowered, in order to offset the impact on oil company earnings from the increase in the duty on dark oil products.
Bashneft stands to lose the most from 60/66, since the company's refining capacity outstrips its crude oil production. The company has lobbied to be compensated for the lost earnings.
RTS$#&: BANE, TATN