Russian President-elect Vladimir Putin on Thursday outlined new rules for the development of vast offshore oil and gas resources, offering some much-needed tax breaks to make far-flung projects viable.
The new proposals, such as abolishing export duty, appeared aimed at appeasing foreign participants in the giant Shtokman gas project as well as the Arctic partnership of ExxonMobil
The move should give a positive momentum for such projects as Shtokman, Valery Nesterov from Troika Dialog brokerage said.
Russia is the world's top crude producer and plans to produce at least 10 million barrels of oil per day until 2020. It needs to sustain overall output, which is declining at its traditional and depleted West Siberian fields, by tapping new deposits in the Arctic and East Siberia.
At a meeting attended by the heads of state-owned Rosneft and Gazprom
Our long-term goal is to secure Russia's leadership on the global energy markets, Putin said.
He also offered to introduce a lower mineral extraction tax for complex hydrocarbon projects in the Arctic.
According to Putin, the projects offshore, where Russian hydrocarbon reserves are estimated at 100 billion tonnes of oil equivalent, may attract as much as $500 billion (313 billion pounds) in investment during a 30-year span.
Shtokman gas project participants - Gazprom, Total
Last week, Gazprom's top official said Shtokman may ditch plans to pipe Arctic gas and focus only on producing liquefied natural gas.
The challenge now is to make the project commercially viable. That has several parts to it, including to reduce investment costs and to have a fiscal framework in place to enable complex offshore projects like these, said Statoil spokesman Baard Glad Pedersen.
In this regard, this is a positive signal from Russian authorities, he added.
NON-STATE COMPANIES PUSH
Analysts and some experts have said that to maintain current record-high level of oil output, Russia has to allow non-state companies to tap the offshore deposits. At present, the law limits involvement in the Arctic offshore development to Gazprom and Rosneft.
Earlier on Thursday, a spokesman for Russia's No.2 crude producer, LUKOIL
The prime minister, who returns to the presidency in May for the next six years after winning last month's poll, signalled that he may approve the request.
I have already asked the government members to think how - more efficiently - invite and use the possibilities of Russian companies, he told the meeting.
Analysts welcomed the move.
If we are going to ramp up oil and gas production quickly ... other companies should be allowed to bid for offshore tenders. LUKOIL has always complained that it fails to obtain an access to a big field in Russia, said Andrey Polishchuk, analyst with Raiffeisenbank.
(Reporting by Gleb Bryanski; additional reporting by Denis Pinchuk and Victoria Klesty in Oslo; writing by Vladimir Soldatkin; editing by Steve Gutterman and Mohammad Zargham)