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MOSCOW, August 2 (Itar-Tass) —— The Ministry of Economic Development suggests reconsidering indicators of effectiveness of the program of prospecting on the shelf and devising an effective mechanism to attract private investors.
“According to the program oil output on the shelf is to reach 36 million tons by 2030,” said Andrei Belousov, the ministry’s head. “As we plan to extract about 510 million tons a year, this means that the increase in the oil output on the shelf in 20 years will be less than ten percent of the entire output,” he said.” “This is too little compared to the planned investment of 9 trillion rubles,” the minister believes.
“We suggest considering indicators of the payoff from this huge program,” Belousov said. He said it is also necessary to device a new mechanism to attract private investors to prospecting on the shelf. “The novel feature of the program must be admitting private investors to the prospecting-extraction cycle,” he noted. ”If we draw private investors there we must tell them in what ways their investment will be recouped,” he said.
He pointed out that there is so far only one way of recoupment of investments. A company that has discovered a deposit should set up a joint venture with one of the two state companies with licenses for operations on the shelf and to work it jointly. “This mechanism entails very high risks for an investor, as it is uncertain if a state company would agree to share out with the private investor and at what cost,” Belousov noted.
“It is apparent there is a need for a certain mechanism to decrease risks for an investor and the idea for such a mechanism does exist,” Belousov said.