Exxon files complaint against Russia over taxes on Sakhalin-1 project

Exxon files complaint against Russia over taxes on Sakhalin-1 project

Houston: ExxonMobil has filed a tax complaint against Russia at the Stockholm arbitration court.

The Irving, Texas-headquartered energy client maintains its subsidiary Exxon Neftegas overpaid taxes by 15% on the Sakhalin-1 oil and gas project in which it has a 30% stake.

Now it wants its taxes reduced and a refund of some of what it has already paid.

Exxon has been arguing it should pay the 20 percent tax rate for the past five years as the VAT rate was cut in Russia in 2008. Other participants in the Sakhalin-1 project continue to pay VAT at 35% based on the original agreement signed in 1995, despite the new rate.

The Sakhalin-1 project is a consortium to locate and produce oil and gas on Sakhalin Island and immediately offshore, in the Okhotsk Sea from three fields. Chayvo, Odoptu and Arkutun-Dagi.

The other shares in the project belong to the Japanese company Sodeco (30%), India’s ONGC (20%) and Russian oil giant Rosneft (20%).

Donal Scully

With 28 years experience writing and editing for newspapers in the UK and Hong Kong, Donal is now based in California from where he covers the Americas for Splash as well as ensuring the site is loaded through the Western Hemisphere timezone.

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