Exxon Neftegas vows to stick to approved Sakhalin-1 budget

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Exxon Neftegas, operator of Russia's Sakhalin-1 oil and gas project, says it will strictly adhere to an approved budget for the project, following accusations by the Audit Chamber that the company had increased spending to levels unprofitable for the government.

Exxon Neftegas, operator of Russia's Sakhalin-1 oil and gas project, says it will strictly adhere to an approved budget for the project, following accusations by the Audit Chamber that the company had increased spending to levels unprofitable for the government.

"The amount of work at Sakhalin-1 has not undergone significant changes. The consortium continues to implement its activities under the initial budget approved by the authorized governmental body," the company said on Wednesday.

"Exxon Neftegas Limited company and consortium members strictly follow existing obligations to develop the Sakhalin-1 project and its future stages and to provide the highest possible benefits from its implementation to all parties in accordance with a production sharing agreement (PSA) on Sakhalin- 1."

The Audit Chamber said on Tuesday that the government could replace Exxon Neftegas as Sakhalin-1 operator for increasing spending on the project to $95.3 billion from the approved $42.8 billion for the period until 2055.

Exxon Neftegas also said that it had presented a phased program of Sakhalin-1 development to an authorized state body.

"The work program and a corresponding costs estimate correspond to the PSA and previously submitted documents approved by the authorized government body," the firm said. "We will continue active cooperation with the authorized government body on future plans for project development."

MOSCOW, October 27 (RIA Novosti)

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