Rosneft spoke about financial disagreements over Sakhalin-1

MOSCOW, August 30 – PRIME. Financial disagreements over Sakhalin-1, about which the US project operator ExxonMobil sent a notice to the Russian government, are a consequence of the company’s unilateral decision to stop production, which generates losses for the parties to the agreement, a representative of Rosneft explained.

“Financial disagreements between the participants of the Sakhalin-1 project are a consequence of the unilateral decision of its operator to stop fishing, which currently generates only losses for the participants in the PSA (production sharing agreements – ed.). Return to normal production activities of the Sakhalin-1 project” could create the necessary conditions for resolving all contentious issues,” he told reporters.

Earlier Tuesday, The Wall Street Journal reported, citing ExxonMobil spokesman Casey Norton, that the American company had recently sent a notice of disagreement to the Russian government over the impossibility of withdrawing from the Sakhalin-1 project due to the new presidential decree. According to the report, if the parties do not resolve the conflict within the specified period, the American company may go to court. At the same time, the newspaper’s sources said that ExxonMobil is already “taking steps to file a lawsuit,” as it believes that the issue is unlikely to be resolved in this time.

The representative of Rosneft noted that the company does not comment on issues that are within the competence of the Russian government, and hopes for the settlement of the problems that have arisen in the legal field in the interests of all project participants.

The decree of the President of the Russian Federation Vladimir Putin, published on August 5, banned until the end of 2022 transactions with shares owned by persons from unfriendly countries in strategic companies of the Russian Federation and their subsidiaries, in the Sakhalin-1 project and the Kharyaginskoye field, in important subsoil user companies, in companies serving the Russian fuel and energy complex, as well as in Russian banks according to the list established by the president.

The ExxonMobil subsidiary remains the operator of the Sakhalin-1 project and owns a 30% stake in it. In March, she announced her intention to withdraw from the project, and in April she announced the introduction of a force majeure regime. Rosneft, which owns a 20% stake in Sakhalin-1, reported that due to the actions of the American company, production on it was practically stopped. On August 3, ExxonMobil said it was working on transferring its operating activities for the project to another, unnamed legal entity. Also, the shareholders of Sakhalin-1 are the Japanese Sodeco (30%) and the Indian ONGC (20%).