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Tatneft is not planning to stop the production of extra-viscous oil

At the moment the company has produced over 10 million t of IOS, the company’s investment in a mining project SVN amounted to 105 billion rubles.

Kazan, Oct 22 – IA Neftegaz.RU. Tatneft will continue the production of extra-viscous oil (EVO) despite the abolition of privileges.
This was reported 1th Deputy General Director for exploration and production of oil and gas, head of the Tatneft Production R. Khalimov.

Abstracts R. Khalimova:

  • in the company there is no panic. We know what to do. We will continue to develop the uplift, which has already been introduced in the development;
  • the mining project SVN Tatneft implements since 2006 Produced more than 10 million tons of SVN. The company invests only in mining project SVN amounted to 105 billion rubles involved more than 4 thousand people;
  • to stop the production of SVN is impossible. Therefore, we have to download steam and to continue production;
  • enter the new elevations are not provided;
  • our task is to form a new investment program for oil production. And we need to decide what areas we will introduce a new tax regime;
  • Tatneft will continue the search for the best solutions, despite changing market conditions.

In September 2020, the government approved the abolition of a number of benefits for oil companies.
It was decided to abolish tax breaks on mineral extraction (met) for Mature fields, fields with SVN, and certain concessions on export duties that have received brownfields.
The new tax regime will come into force from January 2021

Anyway, this initiative will affect all large Russian oil company.

Cancel benefits of SVN mostly affect Tatneft, which is the leader in Russia by the extraction of this oil.

The largest oil companies have complained about the forthcoming document, Russian President Vladimir Putin.

According to their estimates, the adjusted PDM and benefits of mineral extraction tax for 10 years will reduce oil production to 600 million tons, the decline of budget revenues by 4.5 trillion and the loss of 35 thousand jobs.

As a result, the government made concessions.

In particular Rosneft partially compensates for the loss due to new incentives for met for the Priobskoye field for 12 years (for 46 billion rubles/year).

And for Tatneft and Gazprom Neft will be given the opportunity to receive a tax deduction of mineral extraction tax from 1 January 2021 in the amount of not more than 36 billion rubles for 3 years per company.

The Federation Council approved the law at a meeting on 7 October 2020.

Tatneft in 2019, used the privileges for the extraction of SVN 39 billion rubles.

These benefits have been cancelled, instead they Tatneft will be able to get to 12 billion rubles/year.

Thus, despite the tax deduction, the real amount of lost benefits for the company will amount to 27 billion rubles/year.

This is approximately 14% of the net profits of the company, which in 2019 amounted to 192.2 billion.

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