The State Duma assessed the losses of the Russian budget from the fall in production of Sakhalin-1

MOSCOW, 11 Oct — PRIME. Losses of Russian budgets of all levels from a decrease in oil and gas production at the Sakhalin-1 fields by the operator Exxon Neftegas Limited are estimated at 4 billion rubles a month, including 2 billion for the budget of the Sakhalin Region, the State Duma Committee for the Development of the Far East says in the conclusion and the Arctic for the draft federal budget for 2023-2025.

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1 The Ministry of Energy assessed the risk of mothballing wells at the Sakhalin 1 project

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The Ministry of Energy assessed the risk of mothballing wells at the Sakhalin 1 project

“The operator of the production sharing agreement for the Sakhalin-1 project, Exxon Neftegaz Limited (USA), in May 2022 significantly reduced oil production in the Sakhalin region from 220,000 barrels per day to 10,000 barrels per day. As a result, the overall loss budgets of the budgetary system of the Russian Federation are estimated at about 4 billion rubles a month, including the loss of the budget of the Sakhalin region about 2 billion rubles a month,” the document says.

The statement of the State Duma committee also states that last year the volume of revenues to the budget of the Sakhalin region from Sakhalin-1 amounted to 52.6 billion rubles, or 35.1% of the volume of tax and non-tax revenues of the regional budget.

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Sakhalin-1 operator Exxon Neftegaz Limited (“subsidiary” of Exxon Mobil), which owns its 30% stake, announced in March its intention to withdraw from the project, and in April – the introduction of a force majeure regime, as a result of which oil production and gas was first reduced and then completely stopped. Other shareholders of Sakhalin-1 are Rosneft (20%), Japanese Sodeco (30%) and Indian ONGC (20%).

As a result, on Friday, Russian President Vladimir Putin ordered the government to create a new Russian operator of Sakhalin-1, which will take over the rights and obligations of Exxon Neftegaz Limited. The new Sakhalin-1 operator will be managed by the Rosneft structure Sakhalinmorneftegaz-Shelf, at least until all the stakes in the operator are distributed, after which the authority of the structure can be extended.