The Russian government may replace Exxon Mobil as operator of Sakhalin-1 oil and gas project for raising its spending to $95.3 billion from $42.8 billion for the period until 2055, Audit Chamber auditor Mikhail Beskhmelnitsyn said on Tuesday.
"In August 2010, Exxon Neftegas presented a long-term operation program, cost estimates for the full development of the field until 2055. A significant reduction in production is envisaged and at the same time spending rose from the planned volume of $42.8 billion to $95.3 billion. This is a growth of 120 percent ...compared to the costs envisaged in a feasibility study provided for the signing of the Production Sharing Agreement. This will lead to a significant reduction in the state's profit," Beskhmelnitsyn said.
"We have no irreplaceables, this is why any issues and proposals can be considered. Today Russian companies can replace (foreign firms)."
The Natural Resources Ministry has also said the government and Exxon Neftegas were at odds over this year's spending and negotiations were difficult.
MOSCOW, October 26 (RIA Novosti)
