This client update describes (i) new concepts, and clarifications of existing concepts introduced to Russian legislation for taxation purposes and purposes of regulating the creation, operation and use of artificial islands, installations and fixtures on the Russian continental shelf, as well as (ii) changes to Russian legislation aimed at providing incentives for hydrocarbon production at offshore deposits, which include:

• creation of a set of tax incentives;
• exemption for a certain period of time from customs export duties for certain types of hydrocarbons exported from Russia and obtained/produced from the development of a number of offshore deposits; and
• enhancement of the legal regime governing the creation, operation and use of artificial islands, installations, or fixtures on the Russian continental shelf.