China extends hydro-carbons tax waivers
BEIJING, January 6, 2017 – On Friday, China’s Ministry of Finance announced the extension of tax waivers for equipment integral to drilling and production endeavours. Both import tariffs and VAT will fall under the purview of the new edict, which will be in effect through 2020.
Justification for the waivers stems for the inability of Chinese manufactures to produce vital equipment such as semi-submersible drilling platforms and robots capable of operating in depths greater than 1,000 metres and 500 metres respectively.
In an effort to increase oil production, the Ministry of Finance announced in a previous release that it would extend the aforementioned waivers to apply to some 20 onshore hydrocarbons assets located in western China: Xinjiang, Inner Mongolia, Tibet and Qinghai provinces. More than 100 different types of equipment will be affected by the VAT waiver for onshore oilfields being jointly developed.
China’s oil production figures are expected to continue showing incremental growth rates over the medium and long term. Production is forecast to reach 5.7 million bpd by 2040.