The Ministry of Natural Resources has suggested easing access to hard-to-recover oil via cancelling auction payments and granting licences based on requests, according to Sergei Donskoy, the Minister of Natural Resources, Kommersant reports. The only requirement within the licence would be to start operating on schedule.
Under current tax legislation, producing hard-to-recover oil allows companies to receive MET relief. Nevertheless, developing tight oil deposits in Russia is unlikely to be profitable in the current oil price environment, we think. Therefore, in our view easing access to them would not lead to any substantial increase in production in the medium term. As a result, we see the news as neutral for Russian oil names.
To recap, Tatneft placed a horizontal well with tight oil on production in April, while in January, Rosneft and BP decided to postpone the creation of a joint venture to develop tight oil deposits in Western Siberia due to the sanctions.