New incentives for Arctic oil industry
At a plenary session, the State Duma adopted a bill amending the law On the Export of Gas in the first reading. These amendments are expected to give an additional boost to the hydrocarbon extraction on the shelf, production of the liquefied natural gas (LNG), the development of gas chemistry and the exploration of new oil and gas regions in the Arctic.
According to the bill, a zero tax rate will be used once the accumulated volume of gas extraction reaches 250 billion cubic meters or during 12 years after the first raw materials are sold. The incentive is only viable for new production capacities. These projects will also be able to receive regional incentives. However, regions can set lower income tax rates for regional budgets for them.
The amendments will provide incentives to projects of hydrocarbon extraction on the shelf. The largest incentives will be provided for the development of new offshore fields in the northern part of the Sea of Okhotsk, the southern part of the Barents Sea, the Pechora Sea, the Sea of Japan, and the White Sea, where the oil MET will be five percent and the gas MET will be one percent during the first 15 years of commercial development.