Tyumen governor backs proposal to incentivize geological exploration

TYUMEN. Sept 19 (Interfax) - Geological exploration needs additional economic support measures in order to increase Russia's oil and gas potential, the governor of Tyumen Region, Alexander Moor said.

"I altogether believe that more attention needs to be devoted to geological exploration, this is work for the future, after all. And even with the seeming exploration maturity of Western Siberia, we still have great potential for development," Moor said in an interview with Interfax.

"If we offered certain economic incentives at the state level it would be the right decision," he said.

The leader of the Khanty Mansi Autonomous District - Yugra, Natalya Komarova earlier proposed to grant oil companies mineral extraction tax (MET) deductions equivalent to their spending on exploration.

"In order to stimulate geological exploration work, changes [should be made] to the Tax Code that grant production organizations an MET deduction in the amount of expenditures on seismic surveys, and stratigraphic, parametric and exploration drilling, as the riskiest types of work in terms of obtaining a geological result," Komarova said at a meeting of a working group of the State Duma Budget and Taxes Committee's expert council on tax legislation.

The region's authorities believe that introducing a tax deduction will make it possible to book additional reserves, maintain the necessary level of oil production, preserve jobs in upstream and related sectors, as well as boost the investment appeal of oil and gas companies, she said.