MOSCOW, May 12 (RIA Novosti) - On Thursday the government of Russia approved the Strategy of Development and Exploration of Hydrocarbon Resources on Continental Shelves till 2020.
Submitting this document, Russia's Minister of Natural Resources Yury Trutnev said Russia lagged behind other countries in exploring continental shelf. In particular, Russia lags behind Norway, Denmark, Britain, Brazil and all other countries, which work on shelf, in the number of wells drilled and density of seismic work.
The Minister admitted that "serious exploration work has not actually been done on the Russian Federation's continental shelf since 1993."
The volume of work has dropped by 90% compared to the mid-1980s when most of the now existing deposits were discovered.
The Minister considers the absence of stimuli for investors to be an obstacle to the development of the Russian Federation's continental shelf. "Development of the Arctic deposits requires expenditures amounting to billions of dollars, without their recoupment within a short time," Trutnev said.
There are a number of other problems relating, in particular, to the exploration of mineral resources, and the absence of the necessary equipment and costly technologies in Russia.
The excessive administrative barriers in the way of the users of mineral resources wishing to participate in the development of shelf also create difficulties for the development of shelf. According to the minister, "this is linked first of all with the outdated normative base."
The minister stressed that Russia's continental shelf is the world's largest in area. Its area exceeds 6.2 million sq km, with 4 million sq km of them holding promise of oil and gas.
Despite the fact that the primary recoverable resources of hydrocarbon raw materials are estimated at 136 billion tons of conventional fuel (25% of the world reserves of hydrocarbons), oil and gas are, in effect, not extracted on the Russian Federation's shelf, with the exception of Sakhalin shelf where about 2 million tons of oil were extracted in 2004, which makes up less than 0.5% of Russia's total oil output, the minister went on to say.
He recalled that the bulk of Russia's oil and gas reserves was concentrated in the shelf of the Arctic seas which are characterized by severe climatic conditions. It is necessary to take into consideration also the stringent environmental requirements for developing oil and gas deposits in the open sea where any accident can most adversely affect the vast environmental system.
Trutnev proposed making changes in the tax legislation, which will make it possible to minimize the financial risks during the development of the Arctic oil- and gas-bearing shelves in the Russian Federation.
According to him, the Ministry of Mineral Resources is considering the possibilities to stimulate investments in the development of shelves by reducing the standard rates of taxes and payments and using tax vacations and credits for the operators of shelf projects, as well as the possibility of exemption from taxes in doing exploration work, and from the import duties in supplies of unique equipment.
As the resources minister said, measures of this kind can draw sizeable investments in the development of shelves and substantially reduce the investment risks.
