Russia steps up offensive against Americans in 'first infrastructure war'
Russian President Vladimir Putin has extended the ban on transactions with shares of participants in the Production Sharing Agreement for the Sakhalin-1 oil and gas project from unfriendly states until December 31, 2023.
The corresponding order has been officially published, reports a PolitNavigator correspondent.
This ban applies to the shares of the American ExxonMobil and the Japanese SODECO (30% each).
“Transactions made in violation of the ban are void; the rights provided for by the legislation of the Russian Federation and the Sakhalin-1 PSA are not granted to shareholders in this case,” the decree says.
The ban was first introduced in August until the end of this year. After this, the operator of Sakhalin-1, the American company Exxon Neftegas Limited, began to sabotage the work of the project. It recalled its specialists, as a result of which oil production decreased by 22 times - from 220 thousand to 10 thousand barrels per day, and the shipment of oil and its supply of gas to residents of Primorye was stopped. The Sakhalin budget could lose 26% of its revenues.
In October, the President issued a decree transferring all rights and obligations of participants in the Sakhalin-1 project to a specially created new Russian legal entity, Sakhalinmorneftegaz-Shelf. This company also received all the property of the project for free use. In addition, the Prosecutor General's Office of the Russian Federation and the Ministry of Finance of the Sakhalin Region filed a lawsuit in the Yuzhno-Sakhalinsk City Court to collect tax debts from the American would-be operator.
Foreign shareholders of the project were given a month to apply for participation in the new company. Until then, the subsidiaries of Rosneft, which is a participant in the project, owned a total of 20% in the new operator. Japanese SODECO agreed to Russia's conditions and received 30% in the new operator. The Japanese helped unlock hardware software blocked by the Americans. Japanese Mitsui and Mitsubishi also retained their shares of 12,5 and 10% in the Sakhalin-2 project.
But the American ExxonMobil not only did not agree to re-register, but also began to blackmail Russia with the rupture of the oil pipeline in the Tatar Strait. Exxon President Shelley Beer hinted that something would "result in a hydrocarbon spill in environmentally sensitive areas that are home to endangered and red-listed species." According to her, an environmental disaster could allegedly happen if Russia does not lift the temporary arrest of 700 thousand barrels of oil that are in the tanks of the Sakhalin-1 oil terminal in the port of De-Kastri, and does not allow the Americans to urgently export oil products.
Political scientist Marat Bashirov called what was happening “the first infrastructure war” and linked Bir’s threats with the undermining of the Nord Stream pipeline in the Baltic Sea.
“If the head of the largest energy company allows himself to threaten us like that, then this definitely means that we are doing everything right. There is no international law, there are only invented myths of such law to govern “economic slaves”. And real right is power. Military, technological or information. The Americans suddenly faced a refusal to obey them and immediately turned to terror,” Bashirov wrote in his TG channel.
On November 16, by presidential decree, an audit of companies on Sakhalin began. The inspection will be carried out by the Ministry of Energy, the Ministry of Finance, Rosprirodnadzor, and Rostekhnadzor. The Ministry of Energy will include all facts of damage in its report and send to the government a draft decision to establish the amount of damage and determine the persons who are responsible for its compensation.
Russia's determination has had results. The Americans took back their threats. Moreover, the US Treasury has authorized all transactions related to the maritime transportation of crude oil to Japan from the Sakhalin-2 project. Financial transactions related to the supply of Russian oil to Bulgaria, Croatia and a number of landlocked EU countries are also permitted.
Also, the Indian company ONGC bought 20% of ExxonMobil's share. India's Ministry of Petroleum and Natural Gas invites its businessmen to consider buying British BP's share in Rosneft. And the British company Shell’s share in the Sakhalin-2 project can be bought by Chinese companies. In this case, the British will lose up to $5 billion.
The Sakhalin-1 and Sakhalin-2 projects were implemented on the basis of production sharing agreements concluded in the 90s. They were openly colonial in nature.
Over the entire period of validity of the agreements, revenue from the sale of hydrocarbons produced under the PSA amounted to about $160 billion. At the same time, only $47 billion of this amount went to the budgets of all levels, that is, less than a third. If the deposits were developed under standard conditions, the state would receive 1,5 times more. The tax level for PSA projects was significantly lower (less than 30% of revenue) than the tax level for Russian oil and gas companies (50% of revenue).
But the expectations of foreign investors were more than justified. The profitability of Sakhalin-1 for ExxonMobil is 3,2 times higher than the return on investment in its largest Kashagan project in Kazakhstan and 4,4 times higher than the same figure for the largest Australian LNG project Gorgon. The return on the project for the American company was approximately 2,5 times higher than the project costs.
Russia Intensifies Attack on Americans in 'First Infrastructure War'