Russia eyes $225 bn investment in offshore energy: report

21st October 2011, Comments 0 comments

Russia hopes to invest up to $225 billion (163 billion euros) in offshore oil and gas exploration through 2030 and may introduce tax breaks to attract foreign investors, a report said on Friday.

The preliminary draft of a government programme to be discussed for the first time next month admits that Russia's current attempts to develop its Arctic shelf are progressing too slowly, the Kommersant business daily said.

The plan developed by the Natural Resources Ministry, which is one of several under discussion, would see the government lure foreign investors with tax breaks and other incentives long sought by the world's top energy firms.

The most investor-friendly plan under discussion would see the government invest 1.33 trillion rubles ($42 billion) in the joint project while private and foreign firms would contribute 5.7 trillion rubles.

A source at the Russian energy ministry told Kommersant that the government "was on the whole in agreement" with the reported plan.

Foreign majors such as the United States' ExxonMobil have strongly encouraged the Russian government provide private companies with better access to Arctic oil and gas exploration.

They complain of prohibitive taxes, an inability to bid on new projects and licences that are restricted to state-held firms.

ExxonMobil beat out BP to strike a major deal with Russia's Rosneft this year, becoming the first foreign major to get through the door to the Arctic's vast reserves.

The government programme outlined in Kommersant would not see oil production begin from the newly developed fields before 2026.

© 2011 AFP

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