Putin urges foreign investors to tap gas fields

Prime Minister Vladimir Putin on Thursday invited foreign investors to develop a huge untapped gas region in Siberia and indicated that the state could provide tax breaks for projects there.

Putin chaired a meeting with government officials and foreign investors in Salekhard, courting investors to work in the Yamal peninsula which is thought to contain at least 12 trillion cubic meters of natural gas.
In the long term, Yamal could yield 360 billion cubic meters a year, Energy Minister Sergei Shmatko said at the televised meeting.

Putin said the government will consider a tax grace period for investors before their investments break even.

Moscow has been stepping up pressure on foreign energy companies in recent years as part of its effort to consolidate control over Russia’s largest hydrocarbon deposits. But now that the downturn has hit Russia’s oil and gas exports, the Kremlin is looking at foreign investors to help with its huge untapped resources.

Industry analysts repeatedly warned that Russia’s new hard-to-tap oil and gas fields will take a very long time to be developed if Russia does it on its own. While trying to ensure control, Russia is seeking Western involvement and expertise, particularly on projects for liquefied natural gas.

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