HomeMediaLatest NewsRussia's hard-to-recover oil: It is difficult to drill, but we need more

Russia's hard-to-recover oil: It is difficult to drill, but we need more

09 October 2024

Belogoryev Alexey M. Research and Development Director, Director of the Center for Energy strategic analysis and forecasting

Alexey Belogoryev, Research and Development Director of the Institute for Energy and Finance, commented to the Neft and Capital magazine on the feasibility of new tax incentives for the extraction of hard-to-recover oil reserves (TRIZ) in Russia.

As Alexey Belogoryev noted, the government of the Russian Federation has been offering various concessions for projects with TRIZs since 2007. It introduced tax benefits mainly for the MET. By 2020, almost all deposits were subsidized, forming a kind of patchwork. Hence the transition to supplemental income tax as an alternative.

"Starting from 2021, companies are offered either to stay on the MET or switch to a mixed regime with supplemental income tax (where there is also a MET, but the rate is reduced). They have the opportunity to choose. In general, it is still possible to fine-tune the system, since the fiscal burden in the industry is very high. This can be a good incentive for the TRIZ to develop, of course, with an individual approach to each of the projects," Belogoryev explained.

It is difficult to predict how the cost of Russian oil production will increase due to the expansion of work with hard-to-recover reserves, since each site from this category of reserves requires a separate approach.

 

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