Russia will suspend duties on crude oil exports from 13 fields in East Siberia next month in an effort to boost production for Asian markets. The fields include OAO Rosneft’s Vankor, OAO Surgutneftegaz’s Talakan and TNK-BP’sVerkhnechonsk, the government said today on its Web site.

Moscow-based Rosneft plans to raise output from Vankor to more than 500,000 barrels a day from 180,000 barrels at present.

The deposits covered by the ruling are located in remote regions that
are costly to develop and already have exemptions from Russia’s mineral
extraction tax. The fields supply the East Siberian Pacific Ocean
Pipeline, which is aimed at increasing oil sales in Asian and Pacific
markets.

“What’s more interesting is how long this exemption is going to stay in
place,” Alexei Kokin, an oil analyst at IFC Metropol, said by mobile
phone today. “No one has given Rosneft any guarantees.”

Rosneft, the state-run Russian oil producer, has already spent more
than $5 billion developing the Vankor field. It’s lobbied the
government for exemptions from the duty to recoup investment. Rosneft
will transport oil from Vankor oil over 5,000 kilometers (3,107 miles)
by pipe and rail to Russia’s Pacific port of Kozmino, due to open Dec.
27.

Russian Energy Minister Sergei Shmatko said last month that crude
producers would need exemptions of between five and seven years in
order to make a return on the remote developments.

Producers at other Russian fields face a 17 percent increase in oil
export tax, the government said today. The levy will rise to $271 a
metric ton ($36.97 a barrel) on Dec. 1. The tax on light oil products
will climb to $194.90 a ton and on heavy products to $105 a ton.

Russia’s Urals blend export currently trades at $72.73 a barrel.

Source: Bloomberg

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