Shtokman Still Waiting on Tax Breaks as FID Deadline Counts Down

CEO of Statoil Helge Lund has said that Statoil is still waiting on tax breaks in the Shtokman project before the company can go ahead with the project. Mr. Lund told reporters at the IHS CERAWEEK conference that the project was technically ready but not financially so.

"We need significant changes for projects of this complexity," Reuters reports him as saying. "That is a prerequisite for any investment decision.

"Shtokman is basically technically ready, but the tax system in Russia is predominantly built for simpler oil and gas projects."

The statement comes a week after CEO of Gazprom Alexey Miller said that a final investment decision (FID) on the project would not be delayed again, despite rumours to the contrary.

The FID has already been twice delayed, with Helge Lund announcing in January that the decision would be delayed from March 2012 to 1 April 2012. Rumours which emerged last week suggested that the decision could be moved again. However, Alexey Miller last week reassured First Deputy Prime Minister Viktor Zubkov that the decision would be taken by the April 1st deadline.

When asked at the conference whether he thought Russian Prime Minister Vladimir Putin's election to president would have an impact, Helge Lund was unsure.

"We'll see how this plays out," Reuters reports him as saying. "We have felt all the way that there is political support for the project. But it has to translate into a fiscal package that makes the project economically attractive."

Gazprom is the majority stakeholder in the Shtokman project with a 51 per cent stake. Statoil holds a 24 per cent stake in the project, while French major Total holds a 25 per cent stake.