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The Moscow Times: Ministry Presses Exxon on Sakhalin-1

Thursday, September 7, 2006. Issue 3492. Page 5.
Reuters

The Natural Resources Ministry has told ExxonMobil it will not automatically enlarge the license territory of Exxon’s Sakhalin-1 oil and gas block, despite the discovery of new reserves near or at existing deposits.

The ministry said its representatives had told the U.S. oil major, developing the field under a decade-old production-sharing agreement, that they would auction the newly discovered deposits.

The move follows weeks of unprecedented pressure by Moscow on the rival Sakhalin-2, led by Royal Dutch Shell, culminating Tuesday when the country’s environment watchdog said it had asked a court to recognize the agreement did not comply with ecological rules.

The statement said Exxon’s belief it should be automatically granted the rights to develop newly discovered reserves was wrong, even though Exxon said that they represented the same geological structure as existing deposits.

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