Russian Finance Minister Alexei Kudrin suggested high oil prices may make it harder for Rosneft to continue receiving tax breaks from the state for its top growth asset, the Vankor oil field.
State controlled Rosneft has asked the government to extend its exemption on export duty for Vankor, expected to produce 15 million tonnes of crude this year, through 2013 to offset the cost of ramping up one of Russia’s biggest new fields.
“We will consider it but oil prices are high and one can’t say it’s not profitable to operate the field,” Kudrin told reporters.
Brent crude, the benchmark for most of Russia’s oil exports, has spent most of the year over $100.
On Sunday Deputy Finance Minister Sergei Shatalov told Reuters Russia did not plan to extend its favourable low export duty for Vankor beyond May 1 but that the decision was not yet formal.
The government is conducting its latest revision of oil taxation principles to encourage investment and maintain output, which last month was running at a near-record rate of around 10.2 million barrels per day.
Russia’s top tax official, Kudrin deputy Shatalov, told Vedomosti newspaper in an interview published on Wednesday that Vankor would count among the new fields to receive tax breaks during heavy investment phases, and then pay more at peak production.
“The idea of the new system is not to give the industry new tax breaks, but to spread out tax payments over time,” Shatalov said.
