On 9 March 2012 it was reported that the Russian government is considering the introduction of a significant new tax concession to make expensive extra-heavy crude extraction and refinement projects more viable, to boost the nation’s export capacity.
Extra-heavy oil is significantly more expensive to refine than less viscous oil, and generally can only be refined to produce less valuable hydrocarbon forms such as gasoline and diesel.
Under the plans, which have received initial support from the Ministry of Finance, export duties on extra-heavy crude products would be reduced by 90% for ten years, possibly from as early as July 1, 2012. Having announced a 4.4% increase in the standard rate on crude exports for March, at current market rates the tax relief would be worth around USD51 a barrel, or USD365 per metric ton, for eligible projects.
