Zubkov recommends tax cuts to own company
Dual role for Russia’s First Deputy Prime Minister Viktor Zubkov in question about export fee cuts for the Prirazlomnoye oil field.
Viktor Zubkov is heading the governmental committee that is listing Arctic oil and gas fields to be awarded a preferential export duty. On Tuesday it became clear that Gazprom, where Zubkov is chairman, is close to securing export fee cuts for oil produced at Prirazlomnoye, reports Reuters. The oil field is Russia’s first offshore field in the eastern Barents Sea.
The Prirazlomnoye oil platform was towed from Murmansk to its Arctic location earlier this autumn, and production is set to start in the first quarter of 2012.
Former chairman of Gazprom was Dmitri Medvedev. After being elected Russian President in 2008, Medvedev called for state officials to leave their posts in the boards of state-controlled companies in order to get rid of the dual role system. Mevedev’s call was however not meant for board chairmen and Viktor Zubkov could therefore keep his position in Gazprom.
Another high-profile Arctic offshore field that is awaiting governmental approval for tax cuts and export fee cuts for gas is Shtokman in the Barents Sea. The project involves Gazprom, Statoil and Total. Both Total and Statoil have called for tax cuts.
- The (Shtokman) project as it is today is not commercially viable, Statoil’s chief in Russia Jan Helge Skogen saud in November as reported by BarentsObserver. A tax break for Shtokman is not expected to be announced before early next year.
In October, Russia’s state-own oil company Rosneft together with ExxonMobil demanded better conditions for their joint investments into oilfields in the Arctic Kara Sea.
Read also: Tax breaks for the Kara Sea
Main arguments for petroleum companies to get tax breaks and cuts in export duty is that the Arctic fields are expensive and technologically challenging and therefore must be given beneficial investment conditions by the government.
