Rada committee head backs idea to reduce rent on new oil wells for 3 years

MOSCOW. Feb 15 (Interfax) - Daniil Getmantsev, chairman of the Ukrainian Verkhovna Rada's Financial, Tax, and Customs Policy Committee, supported Ukrnafta's proposal that the rent payment for new wells should be reduced, but only for a limited period of three years.

"I basically support Ukrnafta's position, as it concerns granting a preferential rate on wells that are new. But this should be limited by three years, that is, the investment payback period, rather than be unlimited, as is the case with gas," Ukrainian media quoted Getmantsev as saying in comments.

By the same logic, preferential rates should apply to new gas wells only during the investment payback period, which would stimulate investment in exploration and drilling, he said.

Granting preferential rates would not harm the budget, as they would apply only to wells that do not yet exist, he said.

"It's very important to make sure that companies cannot abuse this by passing old wells off as new ones," he said.

The matter concerns efficient administering and is currently being discussed with specialists from the Tax Service, Getmantsev said.