Moscow - The State Duma Natural Resources Committee on Thursday recommended the Lower House adopt in the first reading a bill aimed at developing offshore gas production.
Corresponding amendments are proposed for the Tax Code and other legislation. The Duma Budget and Tax Committee has not yet reviewed these amendments.
The document proposes that organizations developing gas (gas condensate) fields should not have to pay property tax. This concerns Russian offshore property located in the Arctic Sea.
Tax payments at a rate of 2.2% would make projects considerably more expensive and extend the term of recoupment, having a negative impact on the investment appeal of offshore Arctic projects, one of the authors of the document, Valery Yazev, the first deputy chairman of the committee, told Interfax.
“This is a first attempt at finding optimum taxation for offshore development,” he said.
The bill envisages the possibility of creating, operating and using artificial islands, offshore installations and structures without the need to obtain separate permits for companies carrying out work according to agreements with the license holders. However, license holders must monitor their activities.
The bill states that stationary and floating platforms and floating rigs are not capital construction facilities. In addition, it is proposed that restrictions on the turnover of artificial islands and offshore facilities are lifted for companies with the right to create, develop and use artificial islands and offshore facilities.
Yazev said some parts of the bill require additional discussion and corrections. Particularly it is important to take into account that when working on offshore in the Arctic Sea it is very important to follow the highest environmental standards and hire companies with the necessary technology and resources to quickly minimize possible environmental damage.
The deputy said that additional discussion was needed in the issue of eliminating the creation of offshore stationary platforms from legislation on urban development. In addition, a definition is required for “artificial island, structures and facilities,” and restrictions set on the list of persons who may obtain property rights for the created facilities.
The bill is supported by the government with some comments that can be dealt with in the second reading of the document.
