27 Nov 2006 14:58:43 GMT
By Dmitry Zhdannikov
MOSCOW, Nov 27 (Reuters) – Russian state auditor Sergei Abramov said on Monday he expects the Shell-led
“We are expecting the operator to show goodwill. We want the operator to take the initiative to improve the terms for the Russian Federation. I’m sure a mutually acceptable solution will be found. We believe it will be very soon,” Abramov told a briefing in Moscow.
Shell and its partners, Japan’s Mitsui <8031.T> and Mitsubishi <8058.T>, have infuriated Russia by doubling the cost estimate of the Sakhalin-2 oil and gas project to $22 billion, meaning the Russian state will have to wait longer to see any profit from the venture.
Abramov, a member of Russia’s state audit chamber, is charged with drawing up conclusions for an annual submission to the government on production sharing agreements (PSAs).
Russian officials have put pressure all of its three PSAs in the last few months, launching environmental and technical checks on ventures led by Exxon Mobil
Ministers have repeatedly said Russia has no plan to scrap the PSAs, but they have not explained how they might find a compromise over the costs, which have been the subject of negotiations since Shell announced its revised budget last year.
Abramov said Russia would not unilaterally revise the PSA, but it would never agree to a budget of $22 billion.
“But we are ready to review their new calculations when they are submitted,” he said, adding that he was confident a deal could be struck.
“It’s not mere optimism, it’s common sense. This project is important not only for its operator but for the Russian Federation as a whole.”
He said the terms of the PSA meant Russia would get 10 percent of project revenues regardless of oil prices, but it regarded that as unfair and it wanted a bigger slice of the profits when oil prices were higher.
Russian gas monopoly Gazprom
But Abramov said Gazprom’s inclusion in the group of Sakhalin-2 shareholders could pave the way for a solution to the dispute over the venture’s budget.
A spokesman for Shell in London declined to comment.
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