15 Sep 2010 14:06

Discounted Caspian oil duty to take effect 2011

MOSCOW. Sept 15 (Interfax) - The discounted export duty on oil produced in the North Caspian will take effect in 2011, Finance Minister Alexei Kudrin told reporters.

"Probably from next year," he said.

Kudrin did not say what formula would be used to calculate the discounted duty. He said only that he'd given his general backing to a formula on Tuesday and that there would be a discount. He said the discount would be a temporary one and would expire when companies operating at Caspian fields achieve the necessary rate of internal return.

Lukoil (RTS; LKOH) has been lobbying for a zero export duty on oil produced at fields in the Russian sector of the Caspian. The company's chief, Vagit Alekperov, said at a meeting with Russian Prime Minister Vladimir Putin in April when the big Korchagin field went into production that oil production in the North Caspian was highly cost-intensive because this was a new oil province and infrastructure had to be built from scratch.

Russian Energy Minister Sergei Shmatko told reporters this week that a government decree had been drafted to reduce the duty and that the discount might come into effect soon.

He said the government commission chaired by First Deputy Prime Minister Viktor Zubkov would be reviewing the document.

"The discounts will be applied on similar lines to those for East Siberia," Shmatko said. "We're definitely not talking about a zero duty - we have agreed to apply discounts like the ones for East Siberia," Shmatko said.