Putin gives northern oil industry tax cuts

The tax benefits come as Russia looks set to step up exploration and production in the resource-rich northern regions. The measures are taken by a government which is dominated by oil-oriented heavyweighters. Among them is Igor Sechin, the Board Leader of state-owned oil major Rosneft – one of the companies, which is believed to benefit most from the tax cuts. The Finance Ministry proposes to introduce a seven-year so-called tax holiday for the companies extracting oil in the northern regions. The tax holiday will give companies zero-level tax the first seven years of production, after which the accumulated tax sum will have to be returned to the state. Also other benefits are likely to be proposed over the next months, newspaper Vedomosti reports. Among them might be several new measures on how to stimulate extraction and oil processing. The beneficial conditions presented by Putin and his cabinet might still not all please the oil industry. A representative of one of the major oil companies says to Vedomosti that the industry wants even better conditions – five-year tax holidays on all oil fields and seven-year holidays on complicated fields. On the shelf, the industry want forever-lasting zero tax.