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Reuters: Exxon warns Russia to honor Sakhalin deal terms

NEW YORK, Sept 7 (Reuters) – Exxon Mobil Corp. (XOM.N: Quote, Profile, Research) on Thursday issued a sharp warning to Russia to honor a decade-old production-sharing agreement to develop the Sakhalin-1 oil and gas block or risk undermining the confidence of foreign investors.

The statement came after Russia’s resources ministry told Exxon it would not automatically enlarge the license territory of Exxon’s Sakhalin-1 block, despite the discovery of new reserves near or at existing deposits.

Russia says Exxon’s belief that it should be automatically granted the rights to develop the newly discovered reserves is wrong. Exxon said it was working to resolve differences with the Russian government through talks.

© Reuters 2006. All Rights Reserved.

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