19 Feb 2021 14:59

Russian govt working on expanding EPT to highly depleted fields with superviscous oil reserves - Novak

MOSCOW. Feb 19 (Interfax) - The Russian government is working on the possibility of expanding the excess profit tax (EPT) regime for the oil and gas sector to highly depleted fields with viscous and supervisous oil reserves, Deputy Prime Minister Alexander Novak wrote in a column for Energy Policy magazine.

Novak said that in 2020, the tax legislation in the oil and gas production sphere had been amended, which had influenced the sector's economy. Mineral extraction tax (MET) preferences for oil from highly depleted subsurface sites and superviscous oil were canceled, as were export duty preferences for oil with particular physical and chemical properties, and the EPT application procedure was adjusted. Gazprom Neft , Tatneft , and Lukoil were earlier named among the companies most affected by the tax amendments.

"At present, a number of mechanisms are being developed to support the sector. Among them is expansion of the perimeter of application of EPT for stimulating oil production to highly depleted fields containing viscous and superviscous oil reserves. The measures of state support and tax stimulation will help ensure the stability of our country's resource potential in order to satisfy growing oil demand in record time if necessary," Novak said.

He said that from the point of view of development of the oil and gas resource potential in Russia it was necessary to pay equal attention both to supporting traditional production areas and new ones, such as Taimyr, Eastern Siberia, and the Arctic. "Particular emphasis needs to be placed on developing hard-to-recover deposits, including the Bazhenov suite," Novak said.