Russia Upstream Oil and Gas Industry: Tax Policies Increasingly Looking Eastward Says a Market Research Report Available at RnRMarketResearch.com

DALLAS, February 27, 2015 /PRNewswire/ --

RnRMarketResearch.com adds Russia Upstream Fiscal and Regulatory Report that presents essential information relating to the terms which govern investment into Russia's upstream oil and gas sector.

The report "Russia Upstream Fiscal and Regulatory Report" sets out in detail the licensing framework under which firms must operate in the industry, clearly defining factors affecting profitability and quantifying the state's take from hydrocarbon production. Considering political, economic and industry specific variables, the report also analyses future trends for Russia's upstream oil and gas investment climate. Key topics include an explanation of the latest Mineral Extraction Tax and export duty provisions, information on the terms of production sharing agreements for Sakhalin and Kharyaga and an assessment of the current fiscal regime's attractiveness to investors against regional peers.

The recent changes in the taxation of Russia's oil and gas sector reflect both the country's pivot eastward and the special treatment afforded to its state-controlled energy companies. According to GlobalData's Upstream Fiscal Analyst, the so-called 'tax maneuver' shifts the tax burden from export duty on oil and petroleum products to Mineral Extraction Tax (MET) on oil production. It will gradually reduce Russia's marginal rate of export duty to 30% in 2017, while increasing the base rate of MET to RUB919/tonne.

The primary motive for this is to harmonize Russian export duty with that existing in other Eurasian Economic Union countries, particularly Kazakhstan and Belarus, in preparation for the development of a common energy market between 2018 and 2025. While the simultaneous MET hike and duty reduction means that the change is relatively neutral for oil exporters, profit margins in the refining sector are likely to be hit. Order a Purchase copy of this report @ http://www.rnrmarketresearch.com/contacts/purchase?rname=210351 . (This is a premium report priced at US$1000 for a single user License.)

Additionally, new tax breaks targeted at state-owned Gazprom's Chayandinskoye and Kovyktinskoye gas fields and the $21 billion Power of Siberia pipeline have been granted, adding to the strategically important projects receiving preferential treatment. This trend is already benefiting projects supplying China and is likely to extend to other Asian partners, with India's ONGC Videsh looking to capitalize on strong economic ties between the two countries to secure tax breaks on Russian projects.

However, the latest report "Russia Upstream Fiscal and Regulatory Report" states that although the tax maneuver has only recently been implemented, there are already doubts over its longevity. The head of the State Duma's energy committee said that there is a possibility of the maneuver being revoked if gasoline prices rise significantly, and a draft bill to this effect has already been submitted. However, the energy minister contradicted these remarks, saying that a U-turn was not being considered.

Russia's fiscal regime is notoriously prone to fluctuation, and this is expected to continue through the medium term. A reversal of the tax maneuver would be the clearest demonstration yet of the regime's lack of stability, which increases the level of commercial risk in the sector.

Scope of "Russia Upstream Fiscal and Regulatory Report" covers: Overview of the fiscal and regulatory regime governing upstream oil and gas operations in Russia; Detail on legal framework and governing bodies administering the industry; Levels of upfront payments and taxation applicable to oil and gas production; Explanation of the latest Mineral Extraction Tax (MET) and export duty provisions, along with their evolution over time; Detailed information on the terms of production sharing agreements for Sakhalin and Kharyaga; Assessment of the current fiscal regime's attractiveness to investors against regional peers; Outlook on future of fiscal and regulatory terms in Russia.

Reasons to buy 

• Understand the complex regulations and contractual requirements applicable to Russia's upstream oil and gas sector
• Evaluate factors determining profit levels in the industry
• Assess current investment opportunities
• Identify potential regulatory issues facing investors in the country's upstream sector
• Utilize considered insight on future trends to inform decision-making

Explore more reports on Oil & Gas @ http://www.rnrmarketresearch.com/reports/energy-power/energy/petroleum-energy/oil-gas-petroleum-energy-energy-energy-power .

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