Russia has rejected special tax concessions to Indian government-owned Oil & Natural Gas Corp’s (ONGC) Siberia-focused firm Imperial Energy. India had been pressing for tax concessions to Imperial Energy to make up for the prohibitively high cost of extraction from tight oil assets in Siberia because of bad terrain, cold climate and killer taxes.
New Delhi was hoping the high taxes on oil produced by Imperial Energy will be sorted out, sources said. ONGC Videsh, the overseas arm of the State explorer which had in 2009 acquired Imperial Energy for $2.1 billion, says high taxes mean its gets only $19-20 per barrel at an oil price of $90-100.
This nominal net back is generated from the exploratory and production efforts made in the harsh conditions of West Siberia, from where a meagre 13,803 barrels per day of output has to be transported through 5,000 kilometres of pipelines. This is hardly enough to cover the operational expenditure, it feels.
Leave a Reply
You must be logged in to post a comment.