Investment agreement signed on stimulating oil production at the Priobskoye field

Moscow, February 8 - Neftegaz.RU. Russian Ministry of Finance, Ministry of Natural Resources and the Environment and Rosneft signed on February 2021 an agreement on investment incentives for oil production at the Priobskoye field in the form of an annual mineral extraction tax (MET) deduction of up to RUB 46 billion.

The Priobskoye field is the largest oil field in Khanty-Mansi Autonomous Area, which has a complex geological structure and is considered to be multi-zone and low productive.
The Priobsky license area developed by Rosneft has initial recoverable reserves of 1.6 billion tonnes and its current recoverable reserves amount to 1.2 billion tonnes as of January 1, 2019.

The agreement has been signed for 10 years.
Subject to the agreement, the MET deduction is provided when the monthly average Urals price exceeds the threshold stipulated in the fiscal rule.
The agreement enables Rosneft to expand the drilling footage at the Priobskoye field and increase tax revenues for the national budget.

The RUB 460 billion ($6.2 billion) of investments provided by the government supported by additional Rosneft investments are to be allocated for oil production development at the Priobsky license area.

Maintaining and further expanding the drilling footage at the field will ensure incremental production of more than 70 million tonnes by 2030, as well as additional tax revenues at the MET and export duties in the amount of over RUB 500 billion.
The budget impact turns to be positive in 2021 already due to the incentives provided.

The successful implementation of the incentives project for the Priobskoye field will provide an increase of gross output of all additional manufactured products and services of at least RUB 9.3 per 1 rouble invested.
The intensive development of the Priobskoye field will help to maintain Russia’s leadership on the crude oil market, create technologically advanced workplaces, and give a new impetus to the development of production and service industries.