Victor Khristenko on investments in geological fields

The volume of investments in geological fields being tapped in Russia on the production-sharing terms will increase from four to five times next year, Vice-Premier Victor Khristenko predicted to journalists.

Now a main phase of investment activity on such fields is beginning -- their development.

Khristenko said that "breakthroughs in 2002 are not expected". Only three product-sharing agreements are now in operation in Russia -- the Sakhalin-1, Sakhalin-2 and Kharyaginski fields.

He cited as a positive aspect the dynamics of investments in these fields. Thus, while in 2001 the volume of investments in the Sakhalin-1 project was 15 million dollars, in 2003 it will be 750 million and as many as 1,200 million dollars in 2005.

As regards other fields for which the product-sharing formula could go, the lack of a required legislative base stands in the way, said the vice-premier. He recalled that laws have been adopted on 27 fields which can be tapped on the product-sharing terms. Only three are under way.

Victor Khristenko noted that the relative portion of the Tax Code concerning the taxation of participants in product-sharing agreements has been adopted in only the first reading. Simultaneously, he hopes that this chapter will be adopted in full volume before the end of this year and will become "the key for launching other production-sharing projects". In this connection, Khristenko does not rule out that with the coming into force of the new chapter of the Tax Code the number of such projects will fall. "But there's nothing bad about it", noted the vice-premiere.