Russia introduced new tax breaks encouraging oil firms to explore hard to reach undersea fields, in the hope of unlocking new reserves as the country approaches full production capacity from its dwindling oil deposits in West Siberia.

Russia, the world's top energy producer, is now pumping close to its maximum capacity, around 10.5 million barrels a day. The government, hoping to maintain that pace for at least the next decade, is keen to encourage exploration of vast, untapped undersea fields which are estimated to hold more than 100 billion tons of hydrocarbons.

That's the equivalent of roughly 25 years' worth of current global oil consumption, if a means can be found to unlock it. Undersea deposits, some located hundreds of kilometers away from the shore, require huge investment in the form of costly infrastructure such as pipelines or floating drilling rigs.

The new tax breaks are designed to make this kind of investment more attractive. On Monday Russian President Vladimir Putin approved amendments to a bill that will cut tax on mineral extraction as well as reducing export duties and taxes on oil companies' profits, after Russia's Lower and Upper Houses of Parliament both voted in support of the measure.

The new tax regime will apply to both oil and gas deposits and is expected to come in force from next year.