MOSCOW, October 11 (RIA Novosti) - The current production sharing agreement on the Sakhalin-II oil and natural gas project will not be revised, the deputy head of the Russian Federal Energy Agency said Tuesday.
"The production sharing agreement (PSA) law will not be amended," Oleg Gordeyev said commenting on a request from the Sakhalin regional parliament to revise the terms of the agreement.
"The request of the MPs may be taken into account in other PSA projects," he added.
The legislature of the Sakhalin region in the Far East asked the Russian government to increase the royalties (payment for the right to use subsurface resources) payable to the budget.
The Sakhalin-II PSA was signed in 1994 between the Russian party (the Russian government and the administration of the Sakhalin region) and the Sakhalin Energy Investment Company, which currently comprises Shell Sakhalin Holding (55%), Mitsui Sakhalin Development (25%) and Diamond Gas Sakhalin (20%). It was the first PSA to be signed in Russia and came into force in 1996.
The Sakhalin-II project includes an oil field with some associated gas production, a natural gas field with associated condensate production, pipeline, a liquefied natural gas (LNG) plant, and an LNG export terminal. The total reserves of the two fields are 150 million metric tons of oil and 500 billion cubic meters of natural gas.