The Ministry of Finance Will Consider the Production of “Difficult” Oil and Gas no Earlier than 2027
Budget opportunities to stimulate the production of hard-to-recover oil and gas reserves in the next three years are limited, so the Russian Finance Ministry is ready to consider this issue no earlier than 2027, Deputy Finance Minister Alexei Sazanov said in an interview with RIA Novosti.
“I can only say that for the next three years (2024-2026 – ed.) we have limited incentive potential. After this period, of course, we are ready to consider. In any case, it is necessary that appropriate financial and economic justifications be presented, then we will study,” he answered the question about the proposals of the oil and gas industry to introduce incentives for the extraction of hard-to-recover oil and gas reserves.
Novatek this year turned to Russian Prime Minister Mikhail Mishustin with a request to create incentives for the development of hard-to-recover gas reserves. The company believes that in order to maintain a high level of gas production in the Yamalo-Nenets Autonomous Okrug, Russia needs to involve difficult gas reserves that require more expensive equipment and large investments.
The head of Gazprom Neft, Alexander Dyukov, called for the adjustment of the tax regime in such a way that it would stimulate the use of new technologies for the extraction of hard-to-recover oil reserves.
The plans of the Ministry of Energy of the Russian Federation include, by the end of 2023, to work out the expansion of the application of the tax on additional income (ATD) to stimulate the production of hard-to-recover and unprofitable oil, Energy Minister Nikolai Shulginov said. The Ministry of Energy adheres to the position that Russia needs support for offshore production and hard-to-recover oil. More than 40% of production and 60% of reserves are already accounted for by TRIS, and by 2030 this percentage will exceed 70%.