Russian Industry and Energy Minister Viktor Khristenko
Photo: Dmitry Dukhanin
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State Companies Divide up Continental Shelf
Minister of Industry and Energy Viktor Khristenko has officially announced that the Arctic and Far Eastern continental shelves will be developed by Rosneft and Gazprom. The state companies can attract foreign investors at their own discretion. The minister also said that those sections of the continental shelf may have all the benefits now in place in Eastern Siberia extended to them, that is, a break from the mineral use tax.
The continental shelf was not included in the amendments to the Tax Code that made the Eastern Siberian tax break possible, but there remain plans for the government to include it in the second quarter of this year. Ministry of Natural Resources spokesman Rinat Gizatulin stated amendments to the laws “On the Continental Shelf” and “On Mineral Wealth” would be needed.
The decision to divide the continental shelf up between the two state companies was worked out at a meeting in January with Russian President Vladimir Putin, Khristenko, Natural resources Minster Yury Trutnev, Gazprom CEO Alexey Miller and Rosneft president Sergey Bogdanchikov. It was decided at that meeting that the shelf would be distributed by competition, not auction. Khristenko did not specify how the two companies would divide the zone, nor was his ministry willing to comment on that question.
Both companies have hopes for the undistributed blocks of Sakhalin 3. General project manager of ZAO Sakhalin Projects (which belongs to Rosneft) Dmitry Antonov said recently that Rosneft was “keeping an eye on the remaining blocks at Sakhalin 3 and the Magadan shelf. Deputy chairman of the supervisory board of Gazprom Alexander Medvedev stated Thursday that that company wished to take part in a Ministry of Natural resources competition for the same blocks.
Director of the consulting company SRP Expertise Mikhail Subbotin commented that the decision on the continental shelf represents a deregulation of state rights and transfer of part of the authority of the Ministry of Natural Resources to companies with significant private ownership. Ministry spokesman Gizatulin commented on that suggestion that “We don't hold that position.” Subbotin also noted that usually companies are given breaks in profit taxes for stimulation, rather than in taxes of the type that are being offer now. He doubted that those tax breaks would be effective.
www.kommersant.com
All the Article in Russian as of June 04, 2007
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