"The Sakhalin II PSA - a Production 'Non-Sharing' Agreement", a comment on the NGO report by J. Rath
Article from: OGEL 1 (2005), in Production Sharing Contracts
Introduction
Russia is rather dissatisfied with the situation around the two Sakhalin PSA projects (Sakhalin I and II): The Russian National Audit Office has calculated in the report - Bulletin No8 (32) 2000 - that the Russian Federal Budget will lose USD 51.77 billion for the total project period of these PSAs (Sakhalin I and II) compared to the same projects being realised under the Tax &Royalty system. Currently apparently only 4-5% of the equipment for these projects is bought in the Russian Federation, although there are more sourcing opportunities in Russia... The employment obligations ...