Sakhalin-1 and Sakhalin-2 projects might lose tax exemptions

The Sakhalin regional administration is discussing a possibility of depriving operators of the Sakhalin-1 and Sakhalin-2 oil projects of tax exemptions, chairman of the Sakhalin regional committee for international, foreign economic and interregional relations Vladislav Rukavets stated at a press conference today. According to him, "the operators of the projects do not perform their liabilities regarding the Production Sharing Agreement". Rukavets reported that the major provision of the agreement was not observed. According to it, at least 70 percent of Russian citizens should participate in contractual work. Meanwhile, mostly foreigners are involved in offshore works.

Due to this Rukavets stated that he supported acting regional governor Ivan Malakhov who considered it possible to amend the law on taxes and make the companies pay taxes in full. According to the law on Production Sharing Agreement, the Sakhalin Regional Duma exempted foreign companies of a portion of the taxes.

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