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MarketWatch: Shell JV seeking court settlement of Russian tax dispute

Last Update: 6:55 PM ET Oct 22, 2006

LONDON (MarketWatch) — A Royal Dutch Shell PLC (RDSB.LN) Siberian joint-venture is seeking a settlement in court after disputing the conclusions of a recent tax inspection, a spokeswoman for the Anglo-Dutch giant said Saturday.

The dispute is the latest woe for Shell in Russia after authorities threatened to cancel a key environmental permit for another Shell joint-venture, Sakhalin Energy Investment Co. Ltd.

The spokeswoman, Alexandra Wright, said a branch of Salym Petroleum Development, or SPD, which is half owned by Shell and the other by Sibir Energy PLC (SBE.LN), “has recently undergone a routine tax inspection covering the year 2004.”

Disagreeing with the tax authorities’ conclusions, “SPD decided to refer this matter to court,” she said, in an e-mail statement. The spokeswoman didn’t say what amount was at stake.

She explained that “the issues which emerge from time to time and which cannot be settled with the authorities of the Russia’s Federal Tax Service within the framework of mutual consultations, are referred to courts.”

“SPD would like to state that the company has always pursued, and continues to pursue, the policy of strict compliance with the Russian tax laws,” she added.

SPD, which continues to operate normally, was producing 36,000 barrels a day in April and is targetting 60,000 b/d at the end of the year.

-Contact: 201-938-5400 

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