Oil companies propose not imposing export duties on crude deliveries from new projects for payback periods

Oil companies propose not imposing export duties on crude deliveries from new projects for payback periods, an average 10 years. Specifically, such proposals were made by Gazprom Neft and Surgutneftegaz. As the documents provided by Surgutneftegaz said, when bringing greenfields on stream the bulk of capex (70-80%) falls to the first years of field development and depending on geographical and geological conditions greenfields pay off no earlier than in 8-10 years. Sharing Surgutneftegaz's viewpoint, Gazprom Neft pointed out that heavy capex in the course of field development is attributable to the absence of a relevant infrastructure. "Even MET holidays adopted for greenfields for the first 7 years do not secure sufficient returns from investments made. To offer incentives for subsoil users we suggest that no export duties should be imposed on oil supplies as long as funds invested pay off or 10 years on the average" – Gazprom Neft emphasized in its documents.