No time for Shtokman clarity this year
It is unlikely that there will be time to make changes in the tax regime for the Shotkman gas field this year, the Russian Finance Ministry says. The project partners are waiting for tax reliefs before making a final investment decision.
A Finance Ministry official said the tax regime for the giant Shtokman gas field is unlikely to be spelled out in time for a final investment decision. The State Duma has adjourned for the Dec. 4 elections, meaning that no consideration of possible changes to the tax regime applying to the multibillion-dollar project is possible, the official told Reuters, according to The Moscow Times.
Earlier this month, it was announced that a comprehensive package of tax breaks and other benefits for the companies operating on the Arctic shelf would be approved by the government before year’s end.
The list of measures not only includes the introduction of a zero-tax on oil, LNG and condensate export and on import of equipment and technology, but also significant other tax benefits. Among these will be an adjusted production tax, as well as tax on exploration. The companies will not have to pay property tax. In addition, a zero-VAT rule will be introduced both on export operations and on goods and services. Also the system of royalties is likely to be changed, and harmonized with international standards.
The board of Gazprom-led Shtokman Development, in which Norway’s Statoil and France’s Total are junior partners, must meet before the end of the year to take the decision, which would launch full-scale development of the 3.9 trillion cubic meter Barents Sea field.
The Russian Governmental commission for the Fuel and Energy Complex states that the project will go on as planned, and that the first gas will come from Shotkman in 2016, RIA Novosti reports.
The schedule for the giant gas field has been altered several times. In February 2011, the partners discussed postponing launch to 2018.
