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Exxon-led Russian consortium to pay Rosneft $230 million to settle production dispute

Exxon-led Russian consortium to pay Rosneft $230 million to settle production dispute

By Nidhi Verma

NEW DELHI (Reuters) - Russia's Sakhalin-1 consortium, led by ExxonMobil, has agreed to pay Russian energy giant Rosneft $230 million in an out-of-court settlement of an oil production dispute, an executive of an Indian consortium partner said on Friday.

Rosneft had filed a $1.4 billion lawsuit in the Sakhalin district arbitration court in Russia's far east, accusing the consortium of unjust enrichment, an allegation the consortium denied.

The dispute centred around how oil should be shared between the Sakhalin-1 concession and an adjacent Rosneft field.

"Rosneft was demanding that it should be paid $1.4 billion ... We have agreed for an out-of-court settlement and will be paying $230 million as Rosneft entered the other area in 2011," N.K. Verma, managing director of India's ONGC Videsh, a partner in the Sakhalin-1 consortium, told Reuters.

Rosneft declined to comment. ExxonMobil in Moscow declined immediate comment.

“We don’t have anything we can share,” said Suann Guthrie, an Exxon Mobil spokeswoman in the United States.

P.K. Rao, director for operations at ONGC Videsh, said the out-of-court settlement was reached about 10 days ago.

The row was over oil "cross-flows" from Northern Chayvo oilfield, controlled by Rosneft.

Sakhalin-1, off Russia's Pacific Ocean coast, is operated by Exxon Neftegaz Ltd, through which ExxonMobil owns 30 percent in the project. Rosneft and ONGC control 20 percent each. Japanese consortium Sodeco owns 30 percent.

(Reporting by Nidhi Verma; Additional reporting by Ernest Scheyder in Houston; Writing by Vladimir Soldatkin; Editing by Adrian Croft)

This story has not been edited by Firstpost staff and is generated by auto-feed.


Updated Date: Sep 29, 2018 00:05 AM

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