The Auditing Chamber, Russia's head inspecting body, started checks on Project Sakhalin 2, July last, to finish in November, he said. The company had offered the auditors all necessary papers, and will gladly go on with the partnership, reassured Mr. Barry.
As the Moscow-based newspaper Vedomosti said today, the Auditing Chamber had really finished the checks to assume that a production-sharing agreement for the project had robbed Russia of 2.5 billion US dollars. "As we see it, the investors ought to pay the damages to the government," says auditor Mikhail Beskhmelnitsyn, as quoted by the daily.
The Auditing Chamber has recommended Russia's government to convene an extraordinary session on production-sharing agreements, and point out officials who bear responsibility for the respective agreement on Project Sakhalin 2 drafted and signed. The Chamber forwarded an information message on the controversy to the federal Prosecutor General's office.
The production-sharing agreement exempts an investor from most of the taxes, except value-added. The investor, in his turn, partly cedes his produce to the host country-but not before raw material sales recoup all his expenses.
The Sakhalin 2 production-sharing agreement came into force, 1994, with Sakhalin Energy Co. for project operator. The Royal Dutch/Shell holds its 55% block, the Mitsui 25% and the Mitsubishi 20%.
