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. Last Updated: 07/27/2016

Putin Suggests Ditching Nenets Gas Tax

IGARKA, Krasnoyarsk Region — Prime Minister Vladimir Putin on Friday proposed scrapping gas extraction taxes in the Yamal-Nenets autonomous district, responding to repeated pleas from gas companies to ease their tax burden.

But Putin stopped short of pledging similar cuts for gas deposits in eastern Siberia, including the removal of export duties, requested earlier Friday by Gazprom CEO Alexei Miller.

“As you know, a preferential zero rate is already in place for several oil fields,” Putin said at an industry meeting in Igarka.

“The same rule should be attributable to the entire Yamal-Nenets district. Maybe the same privilege should be introduced for gas as well,” he said.

Russia has already provided oil companies represented in the Arctic, eastern Siberia and the Far East with tax breaks needed to support crude output, which last year fell for the first time in a decade.

Miller urged the government Friday to reduce the tax bill for developing gas deposits in eastern Siberia and the Far East.

“Oil companies working in the region have got tax breaks. The same measures are needed to guarantee effective development of gas fields in the east of Russia,” Miller said at a separate government meeting in the Sakha republic.

Miller said such tax breaks could embrace the payback period — during which a company’s investment is recouped.

“Such measures could be tax breaks introduced during the payback period, and lower or zero export duties on extracted gas,” Miller said.

Putin also attended the meeting in Sakha.

Miller asked authorities to provide Gazprom with the rights to more gas fields in Sakha, saying the company needed the gas to fill a pipeline to Vladivostok.

Gazprom obtained licenses for some strategic deposits for free last year as part of a broader state plan to limit strategic developments to state-run firms and restrict the participation of foreign and private companies.