Russia will slash taxes for oil and gas companies that want to conduct business in the Arctic, under a new polar development plan the will span for the next 15 years. The Arctic Master Plan was signed by Putin.
However, the plan has raised concerns about its impact on climate change. In fact, some Russian ministries have warned that this plans has not addressed issues regarding global warming.
Namely, the environmental ministry published a study, indicating that Russia is warming two times faster than any other country on earth, due to increasing temperatures from fossil fuel emissions.
What is more, despite Russia’s backing the Paris Climate Accord, recent climate change plans published by the government, show that Russia intends to take advantage of polar ice melt. Now, many consider that the new plan is a push towards that direction.
According to the plan, for the next 15 years, taxes on all new Arctic shelf oil recovery projects will be reduced to 5%. The percentage falls to 1% for all new natural gas projects. Additionally, new oil projects in the eastern Arctic will be cheaper. The new legislation also suggests that oil drilling there will lead to a zero-level production tax.
As for building ports and other infrastructure to accommodate the oil and gas fields, these businesses will also be cheap.In fact, such enterprises will get a break from any income tax for 10 years.
Overall, this tax relief is expected to result to more than $230 billion in new investments to the Arctic region, with an overall boost in the amount of oil and gas Russia produces.
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