Scavenger oil to receive new benefits

The Ministry of Energy upon an initiative of Surgutneftegaz prepares new proposals on tax reduction during extraction of scavenger oil, the Minister of Energy Alexander Novak told in interview to the Reuters. Four deposits of scavenger oil – the Bazhenovskoye, Abalakskoye, Khadumskoye and Domanikovskoye – received benefits in the form of zero MET for 10-15 years from September. But this benefit applies to only fields with less than 5% of depletion (according to the law – less than 3%), Novak said. And the depletion of Surgutneftegaz’s fields usually exceeds this rate, so the benefit may be extended for deposits with up to 10% of depletion, he added. A representative of Surgutneftegaz declined to comment.

According to Novak, in the near future the Ministry of Energy will make corresponding proposals to the Government. This will be a law on stimulation of difficult oil production; in addition to depletion the MET benefits will depend on thickness of formation and its permeability.