Russia rejects tax sops to ONGC-owned Imperial Energy

Written by Press Trust of India | New Delhi | Updated: Dec 24 2012, 09:03am hrs
Ahead of Russian President Vladimir Putin's New Delhi visit, Kremlin has rejected special tax concessions to state-owned Oil & Natural Gas' (ONGC) Siberia-focused firm Imperial Energy.

India had been pressing for tax concessions to Imperial Energy to make up for the prohibitively high cost of extraction from tight oil assets in Siberia because of bad terrain, cold climate and killer taxes.

Putin is to visit New Delhi on Monday for the 13th annual bilateral summit and New Delhi was hoping the high taxes on oil produced by Imperial Energy will be sorted out before that, sources privy to the development said.

ONGC Videsh, the overseas arm of the state explorer which had in 2009 acquired Imperial Energy for $2.1 billion, says high taxes mean its gets only $19-20 per barrel at an oil price of $90-100.