“Rosneft” asked the government for more benefits on the shelf

“Rosneft” asked the government to change the taxation of offshore operations, in particular, to reduce the preferential tax rates for oil fields in the most challenging Arctic seas, from the current 5% to 1% and make them perpetual. This was reported “Interfax” citing a source in the profile Department and two confirmed the source of RBC in the government.

The company also asks to equate the Pechora sea on tax benefits to the Chukchi and Bering seas to waive import duties on imported equipment and be exempt from paying export duties on oil and bunker fuel used for offshore operations. Now preferential met rate for fields in the Pechora sea is 15% for seven years, and for the Chukchi and Bering seas — 5% for 15 years.

In early June, the company has sent proposals in a letter to Deputy Prime Minister Arkady Dvorkovich, who oversees the fuel and energy complex, according to “Interfax”. The representative Dvorkovich did not respond to a request RBC.

The source Agency argues that the proposals of “Rosneft” already reviewed by the Ministry of economic development. These proposals require additional information and justification, including the financial model of projects and their feasibility, he says. And the Ministry of Finance, these benefits are not approved, as they are considered redundant, said RBC interlocutor in this Department: new benefits, in his opinion, will lead to losses for the budget.

The representative of the Ministry of Finance confirmed to RBC that he had seen proposals for incentives for offshore Arctic Rosneft “In part of customs duties on imported equipment, oil and bunker fuel they have more details to discuss.” But there is no reason to equate the Pechora sea on benefits to the Chukchi and Bering seas, he added. “The current decline in oil prices could not be viewed as a long-term trend to change the taxation of deposits, which will be put into operation after 2025”, – said the interlocutor of RBC.

The government is unlikely now to approve the entire package of benefits on the shelf, which has been requested by Rosneft, says a senior analyst of Sberbank CIB Valery Nesterov: now it is aimed at saving budget and reducing the number of exemptions overall, he points out. According to experts, at present oil prices ($50 per barrel) in the Arctic is unprofitable to produce it. To talk about the economic efficiency of these projects at prices not less than $80 per barrel, which is hardly possible in the next three to five years, says Nesterov.

The representative of Rosneft declined to comment, the press service of the Ministry of Finance did not respond to a request RBC.