Russian authorities have signed a settlement agreement with ExxonMobil, settling a dispute regarding the Sakhalin-1 project at the Russian Far East.

In a statement on Thursday, the Russian Finance Ministry said an amicable agreement had been signed on September 12 between Russia and ExxonMobil in a lawsuit on a claim for recovery of funds under a production sharing agreement for the Sakhalin-1 project.

Exxon in 2015 filed for arbitration at the Stockholm arbitration court, claiming it had overpaid $500 million in profit taxes on its Sakhalin-1 oil and gas project in Russia, and seeking refund and tax reduction.

“The parties reached a mutually beneficial compromise. On behalf of the Russian Federation, the settlement agreement was signed by the Minister of Finance Anton Siluanov,” the ministry said on Thursday.

Sakhalin-1 project, operated by Exxon, comprises three fields in production: Arkutun-Dagi, Chayvo, and Odoptu.

An Exxon spokesperson has confirmed to the Russian news agency Tass that the deal was reached, adding that the details of the settlement were confidential. 

According to ExxonMobil’s annual report for 2016, daily net production from Sakhalin-1 in 2016 averaged 49 thousand barrels of oil and 53 million cubic feet of natural gas. Since the start-up of Sakhalin-1 in 2005, more than 653 million barrels of oil have been produced and exported to world markets. In addition, approximately 692 billion cubic feet of gas have been supplied to domestic Russian customers.


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