Country Report

Russian Federation upstream fiscal summary

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27 November 2020

Russian Federation upstream fiscal summary

Report summary

A concession system forms the basis for nearly all upstream licences and joint ventures in Russia. Joint ventures may include Russian oil and gas companies, and/or international oil companies (IOCs). The Concession regime is based on two major elements: mineral extraction tax (MET) and export duty. The combined effective rate stands at about 60%. Corporate income tax at 20% and property tax at 2.2% rate are also payable. From 2019, oil ED rate will gradually decrease to zero in 2024, while oil MET will increase as export duty falls. The expected impact on upstream is neutral. The new Additional Profits Tax (APT) regime applies to 101 individual fields, effective 2019. The new system consists of a new 50% additional profits tax (APT) and reduced MET.

Table of contents

  • Basis
  • Licence terms
  • Government equity participation
    • Bonuses, rentals and fees
    • Indirect taxes
    • Royalty - Mineral Extraction Tax (MET)
    • Ring fencing
    • Base
    • Onshore oil MET rate
    • Onshore gas and condensate MET rate
    • Offshore MET rate
    • Payment schedule
    • Export duty
    • Ring fencing
    • Base
    • Onshore oil and condensate ED rate
    • Onshore gas ED rate
    • Offshore ED rate
    • Payment schedule
    • Corporate income tax
    • Ring fencing
    • Base
    • Rate
    • Payment schedule
    • Other taxes
    • Property tax
    • Additional profit tax (APT)
    • Fiscal treatment of decommissioning
    • Product pricing
    • Liquids pricing
    • Natural gas pricing
    • Summary of modelled terms
  • Recent history of fiscal changes
  • Stability provisions
  • Split of the barrel and share of profit
  • Effective royalty rate and maximum government share
  • Progressivity
  • Fiscal deterrence
  • Investor IRR versus pre-share IRR - oil

Tables and charts

This report includes 46 images and tables including:

  • Timeline
  • Timeline details
  • Split of the barrel - oil
  • Split of the barrel - gas
  • Share of profit - oil
  • Share of profit - gas
  • Effective royalty rate - onshore , oil
  • Effective royalty rate - onshore , gas
  • Effective royalty rate - shelf/deepwater , gas
  • Maximum government share – onshore, oil
  • Maximum government share – onshore, gas
  • Maximum government share – shelf/deepwater, gas
  • State share versus pre-share IRR - oil
  • State share versus pre-share IRR - gas
  • Investor IRR versus pre-share IRR - oil
  • Investor IRR versus pre-share IRR - gas
  • Bonuses, rentals and fees
  • Indirect taxes
  • Base oil MET rate (set by law) and marginal oil MET rate (calculated by Wood Mackenzie)
  • Oil MET increment
  • Field depletion coefficient
  • Low permeability coefficient
  • Low permeability MET exemptions
  • Reservoir depletion coefficient
  • Duration conditions for the quality and regional coefficient
  • Regional conditions
  • Gazprom fuel unit base rate surcharge
  • Condensate export duty (for MET calculation only)
  • Gas depletion coefficient
  • Location coefficient
  • Depth coefficient
  • Transportation coefficient
  • Condensate surcharge coefficient
  • Offshore MET rate
  • Oil Export Duty
  • Correction multiplier
  • Offshore ED rate (from 1 January 2016)
  • LPG Export Duty
  • Depreciable Life of Selected Oil and Gas Assets
  • Russia standard concession - oil
  • Russia standard concession - gas

What's included

This report contains:

  • Document

    Russian Federation upstream fiscal summary

    PDF 987.15 KB