ExxonMobil plans to invest US$12b

Associated Press, Moscow

ExxonMobil announced plans Monday for what it called the largest single direct foreign investment in Russia to date, a US$12 billion commitment to an oil project in the Russian Far East.

The announcement of the investment in the Sakhalin-1 project was made at the Foreign Investment Advisory Council, a gathering of Russian government leaders and international executives aimed at streamlining economic cooperation.

"I believe our announcement today will have a profound effect on the future of investment into Russia and Russia's integration into the world economy," said Neil Duffin, president of Exxon Neftegas Limited, ExxonMobil's subsidiary operating the project.

Russia will reap enviable benefits off Sakhalin-1, with royalties, taxes and oil export receipts bringing government coffers $35 billion to $40 billion over the duration of the project, Duffin said.

According to a company statement, world-class reserves of Sakhalin-1 total 2.3 billion barrels of oil and 17 trillion cubic feet of natural gas.

Prime Minister Mikhail Kasyanov and the investment council members concurred that the investment announcement indicates further proof of stability of the Russian economy.

"Such an investor and such a large investment is a very important political and economic signal to the world investment community," Kasyanov commented.