of mineral extraction tax to salvage OVL's investments.
Even as OVL's investments in Sudan and Syria has been impacted by adverse geo-political conditions, it has recently clinched an allegedly overpriced $5 billion deal for for 8.4% stake in assets in North Caspian Sea.
As per Russia's rules, OVL is supposed to pay a 35% mineral exploration tax plus a corporate tax of 50%. With production from Imperial Energy remaining low, this is hurting the company. “Current production from Imperial Energy stands at 12,000-15,000 barrels per day, which is much below the projected 45,000 barrels. The Russian government has rejected the OVL proposal for tax rebate since the Indian government has imposed some sort of issues on its telecom venture Seistema,” said Ashutosh Bharadwaj, senior research analyst, Nirmal Bang Institutional equities.
Meanwhile, at the end of the day-long summit meeting, the two sides agreed to intensify efforts to enhance mutual investments in exploration and production of oil and gas in both the countries and joint ventures in upstream and downstream activities in India, Russia and third countries.
Also on the table was Indian oil PSUs' interest in acquiring equity stake in discovered / producing assets and in proposed LNG liquefaction projects in Russia along with Russian oil and gas companies as well as in procuring Russian crude oil and off-take of LNG for India.
Both sides noted that to promote exploration and production cooperation between the two countries, it was essential to source oil and gas from Russia and leverage the market and downstream business in India with involvement of respective oil and gas companies of both the countries, ONGC Videsh in Russia for upstream business and Rosneft in India for downstream business.
While the both sides noted that the gas supply to India by Gazprom Group will be a stable and reliable source of resources for the development of Indian gas market, they also welcomed the conclusion of long term LNG Sales and Purchase Agreement for the supply of 2.5 MMTPA of LNG between "Gazprom Marketing and Trading Singapore” and GAIL and expressed hope for continuation of cooperation in the sphere of LNG supply.