Gazprom to Get Tax Break for Oil Exported from Arctic Offshore Field
OAO Gazprom, Russia’s biggest company by market value, may get a 10-year tax exemption for crude oil exported from its offshore Prirazlomnoye development in the Arctic where production is set to start next year.
The government is waiting for Gazprom to provide economic forecasts before granting the break, said two government officials, who declined to be identified before the exemption is approved. The project will probably not be able to turn a profit without the tax relief, they said.
Prirazlomnoye is Russia’s first major offshore oil project in the Arctic. The project has received a temporary exemption from the mineral extraction tax.
Production drilling on the offshore project is planned for about the first quarter of next year, with output planned to peak at about 6 million to 6.5 million metric tons a year in 2019. The project’s platform and 40 wells may cost $7 billion in total, Nikolay Kabanov, a Gazprom deputy department head, said in St. Petersburg on Sept. 13.
Gazprom spokesman Sergei Kupriyanov didn’t immediately answer calls to his mobile phone.
By Alena Chechel and Stephen Bierman (Bloomberg)
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Posted on October 3, 2011, in Arctic, Arctic Ocean, Natural Gas, Russian Federation and tagged Arctic, Arctic Ocean, Break, Exported, field, Gazprom, Get, Natural Gas, OAO Gazprom, Offshore, oil, Oil and Gas, Russian Federation, Saint Petersburg, Tax. Bookmark the permalink. 1 Comment.