Russia to consider tax holidays for oil fields in Black Sea, Sea of Okhotsk
MOSCOW. July 22 (Interfax) - The Russian government presidium plans to consider granting "tax holidays" to spur development of oil fields in the Black Sea and the Sea of Okhotsk, the Cabinet's press service reported.
"The need for the bill stems from the advisability of creating a favorable climate for developing oil fields located in those seas with the aim of boosting oil production," the statement said.
The draft law would reduce the natural resource extraction tax to zero for oil produced at fields located wholly or partly in the Black Sea or Sea of Okhotsk.
The tax holiday would apply in the initial stage of field development. For Black Sea fields, it would apply until a total of 20 million tonnes of oil has been extracted or for 10 years (15 years for combined licenses). Those parameters would be the same for Sea of Okhotsk fields, except the oil production threshold is 30 million tonnes.
The new law would apply to contractual commitments arising after December 31, 2008.