A Review of the Nigerian Energy Industry

ExxonMobil ‘files Russian tax claim’

03 April 2015, News Wires – ExxonMobil has filed a claim against Russia at a Swedish court as it looks to recoup taxes it says it has overpaid, according to a report.

The US supermajor lodged the claim at a Stockholm arbitrage court as part of its dispute with Russia over tax payments, Reuters reported, citing a spokeswoman at Russia’s Energy Ministry.

ExxonMobil recently asked Russian authorities to refund excessive corporate profit tax payments to its subsidiary Exxon Neftegaz, which operates the Sakhalin 1 oil and gas offshore development near Sakhalin Island in the country’s far east.

Moscow business daily Kommersant quoted unnamed government officials in Moscow as saying recently that the company has asked for a refund of 10 billion rubles ($161 million) for last year.

Refunds of excessive tax payments between 2009 and 2013 have also been requested, according to Kommersant.

Recent reports indicated that ExxonMobil had also implied that it would have to file a claim against the Russian government with an international arbitration court in the event that authorities continue to use the 35% corporate profit tax rate for the project.

Russian authorities approved a reduction of the corporate profit tax to 20% in November 2008, the year when Sakhalin 1 reported its breakeven point.

However, Exxon Neftegaz continued to pay the 35% rate that was written in the production sharing agreement, signed back in the 1990s.

In its request, ExxonMobil is understood to be referring to a clause in the PSA that allows the reduction of the fixed corporate profit tax to the ongoing level in the country once the project breaks even.

– Reuters

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