Tax Breaks Approved for Russia's Largest Oilfield

Russia's finance ministry has in principle approved tax breaks for developing the Priobskoye oilfield, Russia's largest, to oil giants Rosneft and Gazprom Neft (SIBN.ME), Alexei Sazanov, head of the ministry's tax department said on Thursday.

He added that tax breaks for the oil companies could last for 10 years but no start date had yet been agreed.

Sazanov told reporters Russia's budget should be compensated for revenue it will lose due to the tax breaks for Priobskoye and the finance ministry proposed to introduce a mineral extraction tax (MET) for associated petroleum gas (APG) for the oil industry, but no political decision on MET had been made.

The finance ministry is open to discussions on raising other taxes on the oil industry in order to compensate the budget instead of introducing a MET on APG, Sazanov said.

Output at Priobskoye is around 500,000 barrels per day.

(Reporting by Katya Golubkova, writing by Maria Tsvetkova; editing by David Evans)