Yugra Proposed to Establish a Deduction from the Severance Tax to Stimulate Exploration
The government of the region said that this will allow additional reserves to be put on the balance sheet, maintain the required level of oil production and save jobs.
The Governor of the Khanty-Mansiysk Autonomous Okrug – Yugra, Natalya Komarova, proposed establishing a deduction from the mineral extraction tax (MET) in the amount of exploration costs for oil companies. This was reported to journalists in the government of the region.
“In order to stimulate the conduct of geological exploration, amend the Tax Code, providing for a deduction for mining organizations from the MET in the amount of costs for seismic surveys, reference, parametric and exploratory drilling (as the most risky types of work in terms of obtaining a geological result)”, – they quote in the government of the head of the region.
According to the regional authorities, the introduction of a tax deduction for exploration will make it possible to put additional reserves on the balance sheet, maintain the required level of oil production, save jobs in the mining and related industries, and increase the investment activity of oil and gas companies. The Governor also noted that it is necessary to update the tax regimes for enterprises in the industry, in particular, to expand the application of the additional income tax (ATD), which is paid after receiving profit from the sale of mined minerals.
“I support the proposals of oil companies to include about 70 subsoil plots in the Tax Code for transfer to the AIT regime. As well as the proposals of the Rosneft company to fine-tune this regime,” she said.
More than 40% of Russian oil is produced in Ugra. 11.7 billion tons of hydrocarbons are concentrated in the subsoil of the region – this is about 60% of the country’s remaining recoverable oil reserves, a third of them are hard-to-recover, so the authorities are lobbying for measures aimed at stimulating the development of such reserves.
