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Published in Stream:
Russian Update: March 17, 2015
Press by
The Interpreter
@Interpreter_Mag
Russian-to-English translation journal, with original analysis and commentary on Russia's foreign & domestic policy.
Interpreter_Mag
ExxonMobil Demands Return of Overpaid Taxes from Russia
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The US company ExxonMobil is demanding that money overpaid for taxes on profits gained from implementing the Sakhalin-1 project be returned, Kommersant and RBC.ru reported. The amount may number in the "tens of billions of rubles" (the rate is currently at 61 rubles/$1) and is for taxes paid for six years. The Interpreter has a translation:

A new conflict may emerge in Russia with a major foreign investor. As Kommersant has learned, ExxonMobil is demanding that the percentage of taxation on the profit for the project Sakhalin-1 be lowered from 35% to 20%, and that tens of billions of overpaid rubles be returned. The question arose even six years ago, although until now, ExxonMobil, which received the status of a strategic partner of Rosneft in 2011, did not raise it acutely. But sanctions have brought cooperation to nil, and according to Kommersant, two months ago ExxonMobil began to harden its rhetoric sharply, threatening to file suit in the Stockholm Arbitrage Court. Lawyers consider ExxonMobil's position justified, and Russian authorities are hoping for a compromise.


According to Kommersant's sources, Rex Tillerson, president of ExxonMobil, is slated to meet with Anton Siluanov, finance minister, vice premier Arkady Dvorkovich and Igor Sechin, president of Rosneft. The main topic on the agenda will be Sakhalin-1 where ExxonMobil is the operator and owns 30%; the Japenese company Sodeco owns 30%; Rosneft owns 20% and the Indian ONGC owns 20%.

Sakhalin-1 is a project located at three gas and oil fields: Chayvo, Odoptu and Arkutun-Dagi in the northeast shelf of the island of Sakhalin. The potential yield is 307 million tons of oil and 485 billion cubic meters of gas. The project began to turn a profit in 2008 and began paying taxes of 35% in 2009.

Sources told Kommersant they thought ExxonMobil had a good chance of recovering its funds because "few would take Russia's side now in international courts." 

- Catherine A. Fitzpatrick