Russia to increase hard-to-recover oil production in 2016 — ministry

Production of hard-to-recover oil will increase by 10-15% year-on-year in 2016

Russia’s production of hard-to-recover oil will increase by 10-15% year-on-year in 2016, Deputy Energy Minister Kirill Molodtsov told reporters on the sidelines of the St. Petersburg International Gas Forum.

"Last year we produced 21 mln tonnes and this year we will have by 10-15% more," he said.

Earlier Molodtsov said at the press breakfast of Vygon Consulting that by 2020 production of oil from hard-to-recover reserves in Russia will reach 50 mln tonnes a year amid the growing demand for energy carriers in the world.

In July 2013, President Vladimir Putin signed a law on differentiation of the mineral extraction tax (MET) for "difficult oil fields".

The law envisages different rates of MET depending on the project difficulty (decreasing coefficients from 0 to 0.8 are introduced). Amendments to the Tax Code establish the preferential tax rate for new investment projects on production of hard-to-recover oil. Specific tax will be applied to oil extracted on a particular field not on the whole area of fields.

According to the Energy Ministry, the total number of hard-to-recover reserves of oil in the country is 6.5 billion tonnes, which is 50-60% of the total oil reserves.

First published by TASS.

All rights reserved by Rossiyskaya Gazeta.

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