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Sakhalin 1 dispute settled

The Russian government has signed a settlement with US major ExxonMobil over a dispute regarding the Sakhalin 1 development project offshore Russia’s Far East.

The Russian Finance Ministry said an agreement had been signed between Russia and ExxonMobil in a lawsuit on a claim for recovery of funds under a Production Sharing Agreement for the Sakhalin 1 project.

In 2015, ExxonMobil filed for arbitration at the Stockholm arbitration court, claiming it had overpaid US $500m in profit taxes on its Sakhalin 1 oil and gas project, 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.

The Sakhalin 1 project is operated by ExxonMobil and comprises three producing fields: Arkutun-Dagi, Chayvo and Odoptu.

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