Royal Dutch Shell Plc  .com Rotating Header Image

Itar-Tass: Over USD 16 bln worth of PSA signed in Russia

01.11.2006, 21.49 
 
MOSCOW, November 1 (Itar-Tass) — Some 16.7 billion U.S. dollars worth of production sharing agreements have been signed in Russia over years, including 56 percent by Russian enterprises, Deputy Industry and Energy Minister Andrei Dementyev told the State Duma on Wednesday.

In his words, Russia’s total income from the Sakhalin-1 project will be 52.2 billion U.S. dollars under a pessimistic scenario. “This sum is based on the price of 35 U.S. dollars per barrel of oil, up to 2054,” he said.

Dementyev said earnings under the Sakhalin-2 project would be 50 billion U.S. dollars if oil sells at 34 U.S. dollars per barrel up to 2045.

Since the start of Sakhalin-1, Russian enterprises have signed 3.6 billion U.S. dollars worth of contracts, which means that 65 percent of work is done by Russian companies.

Under Sakhalin-2, 5.3 billion U.S. dollars worth of contracts have been signed with Russian companies, which account for 50 percent of the total.

Russian companies have the biggest stake in the Kharyaga production sharing agreement – 72.8 percent, or 462 million U.S. dollars.

By the end of the first half of 2006, about 840 million U.S. dollars had been invested in this project. At the end of last year, Russia’s income from the project was 64.7 million U.S. dollars, of which 47 million U.S. dollars went to the federal budget and 17 million U.S. dollars to the regional budget.

According to Dementyev, “economic terms under production sharing agreements are not fantastically good, but Russia’s income from each of the projects is quite big.”

“Sakhalin-2 has generated 374 million U.S. dollars, and more than 45 percent of the aggregate income will to the Russian budget,” he said, adding, “And this is not the best production sharing agreement.”

Dementyev warned against hasty conclusions about where natural gas from Sakhalin will be supplied. “We will solve this question by taking into account Gazprom’s comprehensive programme on gas supplies in the Far East and Sakhalin,” he said.

Speaking about violations of environmental legislation during the implementation of production sharing agreements, Dementyev said, “Damages will be paid at the expense of the investor’s personal means. These are non-refundable costs.”

In his words, control over the implementation of the project is “quite strong, and violations detected by the Ministry of Natural Resources show that we are not going to let things go all by themselves.”

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

0 Comments on “Itar-Tass: Over USD 16 bln worth of PSA signed in Russia”

Leave a Comment

%d bloggers like this: