Rosneft signs investment agreement with relevant govt ministries on boosting oil output at Priobskoye field
MOSCOW. Feb 5 (Interfax) - Russia's Finance Ministry, Natural Resources Ministry, and state oil company Rosneft have signed an investment agreement on boosting oil output at the Priobskoye field, the Finance Ministry said in a statement posted on its website.
The signed agreement stipulates that Rosneft assume responsibility and obligations for additional investments in developing oil production at the Priobskoye field, the Finance Ministry said in the statement. Consequently, the agreement sets the planned volume of output for 2021 to 2032, excluding tax deductions, with the oil company being obligated to boost production in exchange for receiving the tax exemptions. The maximum amount of tax deductions is 3.830 billion rubles per month if the average monthly price level of Urals oil exceeds the baseline of $43.30 per barrel in 2021, based on which budget expenditures are formed. If the average monthly oil price is below or equal to the baseline price, then the tax deductions are not applied. Rosneft could receive tax deductions of no more than 460 billion rubles in total .
The agreement sets the procedure to monitor implementation of the terms of the agreement in order to achieve budgetary efficiency in providing tax incentives. Specifically, Rosneft every three years must present to the Finance Ministry a report that indicates the planned and actual volumes of oil output as well as other indicators for calculating federal budget revenues.
The Finance Ministry oversees control of Rosneft's fulfillment of the responsibilities and obligations set in the agreement, the ministry specified.
"The document clearly spells out the conditions for providing tax incentives as well as the responsibilities for non-compliance with the terms of the agreement. By using the mechanism, government support is set to achieve the goal of increasing companies' investment activity as well as to contribute to developing sectors of the economy," Finance Minister Anton Siluanov said in the statement.