NRG FSU OGM: Rosneft scores more tax breaks

Russia’s state oil producer Rosneft has signed an investment deal worth up to RUB46bn ($617mn) annually with the country’s natural resources ministry, covering incentives at the large but mature Priobskoye oilfield in Western Siberia.

Output at the Soviet-era Priobskoye field peaked at 33.8mn tonnes (679,000 barrels per day) in 2009 and has been declining ever since, dropping to 480,000 bpd in 2019. Even so, it still accounts for roughly 5% of Russia’s national oil output.

Rosneft has secured a deduction in mineral extraction tax (MET) at the site. The amount is calculated according to oil prices but can reach as much as RUB3.83bn ($51mn) per month and up to RUB460bn ($6.1bn) over the ten-year period. In return, the company has pledged to recover an extra 70mn tonnes (513mn barrels) of oil from the field over the next decade.

Meanwhile, it has been revealed that Rosneft is looking to produce up to 30mn tonnes per year (tpy) of LNG from a pair of gas discoveries it made off Russia’s Arctic cost last year. The Kara Sea terminal was discussed along with other Rosneft projects at a meeting on Russia’s LNG strategy last month, chaired by Russian Deputy Prime Minister Alexander Novak.

Lastly, Rosneft has signed an agreement with its largest foreign shareholder BP on working together to reduce emissions. It is in both companies’ interest to show climate-conscious investors they are serious about decreasing their carbon footprint.

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