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Pushing for Tax Concession for Gas Field in Russia:Win-Win Proposition for Both Russia & ONGC Videsh

India has again pressed Russia for tax concessions for some energy assets Oil and Natural Gas Corporation(ONGC) operates there. In a meeting with his Russian counterpart last week, oil minister Dharmendra Pradhan argued for lower taxes for Imperial Energy that ONGC has been struggling with since its purchase six years ago.

Source:  ET

SNP Insights

Decrease of mineral exploration tax, will give some breathing space for loss making Imperial Energy. Exploration of almost 360 billion recoverable shale reserves in Bazhenov field, if possible  will benefit ONGC Videsh Limited (OVL) substantially. It may boost OVL investment in other Russian gas field & hence can be a win - win situation for both Russia & OVL.

Source: SNP Infra Research