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Russia to announce solution in dispute with ExxonMobil over Sakhalin-1 soon

The US company requires that the Russian authorities should reimburse the overpaid profit tax on the project

VLADIVOSTOK, September 7. /TASS/. The Russian government will soon report on how it resolved the dispute with ExxonMobil around the Sakhalin-1 project, President Vladimir Putin said at the plenary session of the Eastern Economic Forum.

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Key facts about ExxonMobil and its business in Russia

"We are resolving the crises, trying to find solution on those points Exxon Mobil [formerly chaired by the current US Secretary of State Rex Tillerson], is interested in to continue working in the Far East, working on Sakhalin-1. Even amid the diplomatic scandals, we have now agreed with them on how we will get out of this situation, taking into account their interests. The Russian government will announce it (the solution) in the very near future," Putin said.

According to the Russian leader, such steps to resolve controversial situations are gradually creating a favorable situation for the development of business activity in the Far East.

ExxonMobil is the operator of the Sakhalin-1 project and works in partnership with Rosneft. The US company requires that the Russian authorities should reimburse the overpaid profit tax on the project.

In the arbitration, Exxon demanded to reimburse part of the overpaid profit tax for the last 6 years for the sum $500 million. The company referred to changes in the rate of income tax in Russia, which was lowered in 2009 from 35% to 20%. However, the production sharing agreement of Sakhalin-1 does not provide for changes in rates of taxes during the entire term of the agreement.

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