What Happened: The chief executive officer of Russian oil giant Rosneft has asked the Russian government for tax breaks worth 2.6 trillion rubles ($41.3 billion) in a private letter obtained by Russian newspaper Vedomosti, the paper reported July 14. According to the letter, the tax breaks are necessary to facilitate investments of up to $135.2 billion in Arctic energy projects.
Why It Matters: The Russian government has already suggested potential tax incentives to encourage companies to invest in the Arctic region as it considers the area essential to its geostrategic plans. If implemented, however, large-scale tax breaks could put significant pressure on Russia's government budget.
Background: Russian President Vladimir Putin expects cargo volumes on the Northern Sea Route to rise to 80 million metric tons per year by 2050, while Rosneft's chief executive officer has said the region could produce up to 100 million tons of oil by 2030.