Pjsc Tatneft Regulatory News (ATAD)

4 Aug 2006 11:10

O.A.O. Tatneft04 August 2006 Amendments to the Russian Tax Code Introducing Improved Mechanics forCalculation and Payment of Natural Resources Production Tax Approved 3 August 2006 On 28 July 2006, President Vladimir Putin signed the Federal Law "On Amendmentsin Chapter 26 of Part II of the Tax Code of the Russian Federation andConsidering Certain Legislative Acts of the Russian Federation Expired" that waspassed by the State Duma on 8 July 2006 and approved by the Federation Councilon 14 July 2006. The law introduces a differentiated taxation of natural resources productionthat is tied to the level of depletion of reserves (discount will apply to oilfields with the depletion ratio above 80%). Differentiated taxation will allowOAO Tatneft and other companies producing oil at fields with high level ofdepletion to extend the term of economically viable production from such oilfields. According to evaluations of Tatneft's experts, oil production atTatneft's largest oil field Romashkinskoye which is one of the oldest will besubject to the reduced rate (with application of the discount tied to depletionlevels). In addition, the new law establishes zero tax rate for production of viscous(heavy) oil produced from resources containing oil with high viscosity over 200cp (in layer conditions). Currently OAO Tatneft conducts active works forexploration of bitumen reserves on the territory of Tatarstan. Tests oftechnology for pilot production of bitumen whereby steam is pumped withhorizontal pass through wells were conducted this year on Ashalchinsky oilfield. According to certain evaluations, there are from 1.5 bln up to 7 blntons (approximately from 10.8 up to 50.4 bln barrels) of natural bitumen inTatarstan with average occurrence at 80 up to 200 meters (from 262.47 up to656.17 feet). Zero rate for production of bitumen would significantly improveeconomics of production from such fields. The Federal Law "On Amendments in Chapter 26 of Part II of the Tax Code of theRussian Federation and Considering Certain Legislative Acts of the RussianFederation Expired" will come into effect on 1 January 2007. Forward-looking statements: This press release contains certain forward-lookingstatements of OAO Tatneft. OAO Tatneft can give no assurance that any of theevents mentioned in such statements will occur, or as to the precise timing oftheir occurrence This information is provided by RNS The company news service from the London Stock Exchange