Sakhalin Energy Project Overview

SAKHALIN ENERGY Fin Production Sharing Agreement and Russian Content 3 Production Sharing Agreement and Russian Content > 23 BILLION USD - - value of contracts concluded with Russian companies by the end of 2015 Wenaas ЭНЕРГИЯ Production Sharing Agreement: Advantages for the Country КАЯ 3 MECHANICS OF SUCCESS The Sakhalin-2 project is being implemented under the Production Sharing Agreement (PSA), which is a solid commercial foundation for exploration and development of oil and gas fields. The Production Sharing Agreement (PSA) for the Sakhalin-2 project was concluded in 1994 between Sakhalin Energy, the RF Government, and the Sakhalin Oblast Administration (currently, the Sakhalin Oblast Government) and became the first agreement of this kind in Russia. The current PSA is a viable mechanism for attracting long- term investments into the country's economy, and it is rightfully considered to be one of the principal conditions for the successful implementation of the Sakhalin-2 project. It determines the algorithms of interaction between the parties and covers the issues of the Russian enterprises' participation in the project. The PSA ensures stable legal and financial conditions throughout the project implementation and, in spite of a difficult global economic situation, allows keeping all the arrangements and continuing the work. The Russian Federation has powerful levers which guarantee financial transparency of the project. The RF Government and the Sakhalin Oblast Government, through their representatives, participate in the project's governing bodies and continuously monitor the work progress and the company's expenses under the agreement. Successful performance of the PSA at the Sakhalin-2 project is of considerable importance for Russia, as this generates additional revenue for the federal and regional budgets, stimulates social and economic development, and boosts inflow of investments into the Russian economy. 9

View entire presentation