The fate of tax reform in the Russian oil sector depend on the outcome of the dispute around Samotlor, one of the largest fields in the world, owned by Rosneft, Vedomosti reports.
According to the publication, the company has opposed the Finance Ministry’s proposals on transfer of the Deposit to the taxation added tax income (JPM), albeit subject to special conditions and requires conservation at Samotlor tax on mineral extraction (met) benefits. Otherwise, the main Executive Director of “Rosneft” Igor Sechin can oppose the initiative as introduction to oil industry demands, the sources of “Vedomosti”.
According to them, at the last meeting with Prime Minister Dmitry Medvedev on 20 January, the Prime Minister gave the relevant departments a month for approval related to the tax reform in the oil industry issues.
A source close to one of the participants of the meeting, Medvedev reiterated that differences over tax reform in the oil sector persist and the transition to the PDM strongly depends on the position of “Rosneft”. According to him, the meeting with the Prime Minister in addition to Sechin was attended by the Minister of Finance Anton Siluanov and the head of LUKOIL Vagit Alekperov. Alekperov also asked for special incentives for one of the largest fields of LUKOIL — Imilorskoe, he added .
In mid-January 2017, in the course held in Moscow Gaidar forum Finance Minister Anton Siluanov has called for the transition in the oil sector on the PDM in the next two years with the simultaneous abolition of privileges that exist at the present time.
According to the Finance Ministry, the taxation of Samotlor oil field, the mining tax at a concessional rate will cost the Treasury 60-80 billion rubles. per year. As a result, over 10 years, the budget may lose all that he had received from the recent sale of the package at 19.5% of Rosneft shares to a consortium of Glencore and QIA.
For “Rosneft” the preservation of the preferential tax treatment of Samotlor, which accounts for around 10% of its production, is extremely beneficial. According to estimates by Raiffeisenbank analyst Andrei Polishchuk, if the current price of oil and annual production of “Samotlorneftegaz” 20 million tonnes of preferential rates for mineral extraction in 50% saving of “Rosneft” in 2017 to $1.4 billion.
According to the Federal tax service and analysts Vygon Consulting, over ten years (from 2006 to 2015), the share of benefits in the training camp met with the oil industry as a whole increased from 0% to 16%, in 2015 enjoying the benefits of the oil company saved 355 billion rubles In total of various tax incentives now apply to 198 fields of Russia.