Tuesday, 13 July 2010

LUKOIL in talks about Caspian tax breaks

LUKOIL is in the process of trying to win tax breaks from the Russian government for developing its Caspian Sea oil fields. If successful, the Russian oil giant will save around $460 million in taxes in 2011.

A number of industry sources have said that the company is in the preliminary stages of the deal, and has come to an agreement with the Russian Finance Ministry about lowering of export duties for its operations in the Caspian region.

The tax breaks scheme is expected to be similar to the one applied for East Siberian fields, where producers pay 45 per cent of regular export duties when the price of crude oil exceeds $50 per barrel. The incentive for tax breaks is to help producers with new developments, and allow Russia to maintain its high production rates.

A LUKOIL spokesman, Dmitry Dolgov, confirmed that the company is still in talks about tax breaks which commenced earlier this year, after LUKOIL approached the government about lowering taxation for two of its deposits, Korchagina and Filanovskogo, in the Caspian Sea.

Source: Reuters

To find out more about LUKOIL, please visit LUKOIL's web site which you can find here.

For more news and expert analysis about the Caspian region, please see Caspian Focus.

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