Sakhalin-1 production last year was less than half the planned volume

Production at the Sakhalin-1 oil and natural gas project in Russia’s Far East was more than half below plan last year. Sakhalin Region Governor Valery Limarenko said this today. The Sakhalin-1 project saw a sharp drop in production after US oil and gas giant ExxonMobil withdrew from it in response to Russia’s attack on Ukraine, Reuters reported.

“First, oil production practically came to a halt in May, and then gas production did so in September. We lost a large volume, more than half of the annual target,” Limarenko said at today’s meeting with Russian President Vladimir Putin, which was broadcast on Russian television.

“Given that two-thirds of the regional budget consists of taxes on oil and gas, we will lose around 50 billion roubles (almost CZK 15 billion),” he added.

Russia is now seeking to make up for the losses caused by ExxonMobil’s departure. Russian prosecutors are asking a court to recover allegedly unpaid taxes of 15.5 billion roubles (around CZK 4.6 billion) from the US company, Reuters reported.