RusEnergy

12/05/2005 - RZD News - The government of the Russian Federation intends from now on to devote special attention to the development of gas-fields on the continental shelf, not on land. Measures to raise the effectiveness of the development of the mineral resources of Russia's continental shelf will be the principal item on the agenda of the government's meeting here on Thursday. The main report on the subject is to be presented by Minister of Natural Resources Yuri Trutnev, a Russian government press service official has told Itar-Tass. The report is actually a draft strategy to study and tap the oil and gas potential of the country's continental shelf until the year 2020, the government official said. At present, "Not more than 9-12 percent of the continental shelf has been explored. However, it can be expected that large unique offshore mineral deposts will be discovered". The source said, the possibility of finding large mineral deposits on land has decreased by 80 percent since 1975. Besides, already 75 percent of deposits in Russia have been developed and depleted by half. As a result of implementing the strategy to tap the oil and gas potential on the continental shelf, the source said, it is supposed that by 2020 the prospected reserves will amount to about 13,000 million tonnes of oil and 20,000,000 million cubic metres of gas. So, by 2020, oil production on the shelf may amount to 95 million tonnes a year, or almost ten times as much as that in 2010. As far as gas is concerned, its produciton may amount to 30,000 million cu. m. by 2010 and to 320,000 million cu. m. a decade after that. Government analysts believe that by 2020 "The shelf may rank second or third among Russia's mineral resources mining provinces". The area of the country's continental shelf is 6.2 million square kilometres, with 4 million sq. m. being regarded as promising as to presence of mineral deposits. Despite the fact that the investment attractiveness of the study and development of the continental shelf is low due to high risks, an unfavourable geographic and economic disposition, and legislation shortcomings, the Ministry's estimates are that attracted investments, mainly foreign ones, would amount to 70,000 to 110,000 million US dollars by 2020 while the expected expenditure of the Federal budget are to run at 35,000 million roubles. On the whole, "The aggregate Federal budget revenue from the development of the continentnal shelf are to amount to 100,000-130,000 millin USD by 2020". Those present at the government meeting are also expected to consider a number of the Ministry's proposals connected with the creation of additional incentives to attract foreign investments, including the introduction of a differentiated rate of tax on the production of economic minerals, depending on geological and climatic conditions for the conduct of work, reports ITAR-TASS. The Cabinet is also to mull the possibility of reducing or cancelling duties on the imported marine and research equipment. The Ministry of Natural Resources also intends to suggest that the government mull "the founding of a national compnay to study and develop the resources of the continental shelf".