Tuesday, July 15, 2008

Energy in focus: Washington Post reports Russia has missed oil targets on many of its energy projects

Russia's energy projects, all of which have foreign participation, failed to achieve their oil production targets in 2007, the state auditor said. The projects were ExxonMobil's Sakhalin-I, Gazprom's Sakhalin-II in the Far East and Total's Kharyaga, Russia's Audit Chamber said. All of them operate under production-sharing agreements, or PSAs.

Russia devised PSAs in the 1990s to lure foreign investment into some of its more difficult and inaccessible oil fields. Under PSAs, companies were able to recoup investment costs before sharing profits with the Kremlin. But such contracts fell out of favor with growing resource nationalism.

Click here to access the full article from the Washington Post