The company offers to share profits with investors in exchange for technology and financing

Gazprom Neft asked the Ministry of Natural Resources to support a new scheme for working with investors, providing for the division of profits with them in exchange for technology and financing and allowing to avoid sanctions, RBC reported on Wednesday, August 25, with reference to a letter from the head of Gazprom Neft, Alexander Dyukov, vice-president. Prime Minister Alexander Khloponin, who oversees subsoil use.

The appeal was sent on April 21, the publication notes. The letter notes that the form of work with investors for the development of oil and gas fields, accepted abroad, provides for two mechanisms of work: a risk operator agreement (ROA) and a joint development agreement (JDA). Both options give the company the opportunity to attract funds and technology to develop new fields in Russia under sanctions.

Dyukov clarified that the implementation of the proposals will require amendments to the Tax and Civil Codes. In particular, it is necessary to introduce the right to deduct VAT for foreign partners participating in this scheme, as well as changing the calculation of income tax for a company that holds a license but shares income with the operator and the investor.

Under the proposed mechanism, the license and development rights remain with the Russian company, and investors and technology partners receive a share of the income from the sale of oil from the partner’s field in exchange for financial assistance and technology. Currently, the country has one form of income sharing between a group of investors in one raw materials project - a production sharing agreement.

According to RBC, Khloponin instructed the relevant departments to work on this issue in May, but he himself has not yet responded to the proposal. On July 20, a meeting was already held on this matter - “On consideration of the concept of improving legislation for the introduction of effective contractual forms of joint subsoil use”, presented by Gazprom Neft with the participation of the head of the Ministry of Natural Resources and Environment Sergei Donskoy.

According to the protocol, a copy of which was obtained by RBC, in addition to lawyers from the oil company and officials from the Ministry of Natural Resources, representatives of the Ministry of Energy, the Ministry of Justice and the Ministry of Economic Development took part in it.

During the meeting, Gazprom Neft lawyers presented the concept, noting that Russian companies already use similar forms for foreign projects. In particular, previously oil workers established companies abroad that played the role of operators of projects in Russia, and the rights of investors to a portion of the profits were registered in them under English law. Now, Gazprom Neft said, structuring such transactions under English law creates risks of blocking oil companies’ operations abroad and losing control over assets.

The press service of Gazprom Neft did not respond to the publication’s request. The press service of the Ministry of Natural Resources confirmed the meeting, noting that the department generally approves of Gazprom Neft’s proposal, but sent the concept for revision until September.

The Ministry of Finance, in turn, does not support the calculation of VAT for ROD and SSR, similar to the procedure established for simple partnership agreements, that is, division according to the contribution and agreement of the participants. The financial department believes that the participants in the partnerships about which Dyukov wrote to Khloponin have no grounds for deducting VAT.

Gazprom Neft asked to legislatively protect investments from sanctions