Clearly Russia, China and India expect oil consumption to play a big part in their futures, even if some other countries claim to think otherwise due to their ill-conceived drive to demonise man-made carbon dioxide. Potential protesters may be aware that Russia tends to apply a robust response to any attempt to interfere with its commercial activities.
With the help of a tax relief package, Russia’s largest oil producer is preparing to dive into a $157 billion Arctic oil project, reports OilPrice.com.
Reuters quoted Russia’s Deputy Energy Minister Pavel Sorokin as announcing the price tag of the Vostok Oil project to media last week, adding that the Kremlin had already agreed on a tax relief package that would help with the Arctic oil and gas push.
The Vostok Oil project will include already producing fields as well as untapped ones, and Rosneft will develop them along with partner Independent Petroleum Company. The tax relief for this project alone could reach some $940 million (60 billion rubles) annually, the chief of the tax department of Russia’s Finance Ministry said.
The tax relief package for the energy industry has been the subject of heated debate in political circles because at the same time that the Kremlin is lending its generous support for oil and gas, it is hiking other taxes, on citizens, and extending the retirement age as part of a delayed and highly unpopular retirement system reform.
Yet the Vostok Oil project could add some 2 million bpd to Russia’s overall oil production, which although not the biggest contributor to federal GDP is still the biggest single contributor to export revenues, at 53.8 percent.
The government’s tax relief would certainly go a long way towards helping Rosneft and its partner develop the Arctic fields, but it will not be enough on its own. To bring the plans to fruition, Rosneft would need foreign partners as well.
And it has already found them: Indian and Chinese investors have already agreed to invest in Vostok Oil in exchange for minority stakes in the fields that the project includes.
Full report here.
via Tallbloke’s Talkshop
October 29, 2019 at 08:00AM