Russia's Rosneft demands $1.4bn from partners in Sakhalin-1 project

Russia's Rosneft demands $1.4bn from partners in Sakhalin-1 project
Development of the Odoptu field has included world-class performance in the drilling and completion of seven extended-reach wells. / Exxon Neftegas Limited
By bne IntelliNews July 24, 2018

Russian state oil major Rosneft is claiming RUB89.1bn ($1.4bn) from its foreign partners in the Sakhalin-1 liquefied natural gas project, Vedomosti daily said on July 23 citing the island's court materials.

Reportedly the claim is against five Russian companies, out of which two are affiliated with Rosneft. Those are SakhalinMorNefteGaz-Shelf and RN-Astra, from which RUB17.8bn compensation is demanded. 

Notably, Exxon Neftegaz Limited controlled by the US major Exxon, a subsidiary of Japanese SODECO, and Indian ONGC Videsh are also part of the case, with Rosneft demanding rewards of RUB26.7bn, RUB26.7bn, and RUB17.8bn, respectively.

Exxon, SODECO, and ONGC control 30%, 20%, and 20% in Sakhalin-1, respectively. Previous reports indicated that ExxonMobil had settled its exit from Sakhalin-1 as it was pulling out of all joint ventures with Rosneft due to the US sanctions.

Russia claimed $637mn in income tax breaks Exxon allegedly received under production sharing agreements in the joint venture of Sakhalin-1. In September 2017 Russia's finance ministry said the issue has been solved in a "mutually beneficial compromise", the details of which are not disclosed.

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