Kharyaga arbitration case resolved

December 7, 2005, 15:00 CET

Russian federal- and regional governments and the owners of the Russian Kharyaga oil field have reached an amicable solution concerning a tax dispute.

Hydro has a 40 per cent ownership stake in the Kharyaga license, which is holding one of three production-sharing agreements (PSA) in Russia. 

"Hydro is pleased that all issues in regards of the planned international arbitration in Stockholm are amicably settled, in cooperation with the Russian Federal Government and the Administration of the Nenets Autonomous Region, says Petter Nore, president of Hydro Russia.

The Production Sharing Agreement Joint Committee in Russia and the managing body of the Kharyaga project have approved the relevant past annual work programs as well as past budgets and past cost recovery.

These entities consist of representatives of the Russian Federal Government, Nenets Autonomous Region Administration and partnered companies. As a result, the Russian Tax Authorities have revoked their tax claims.

Total is the operator of the field with a 50 percent participating interest alongside Hydro's 40 percent interest and the Nenets Oil Company's 10 percent interest.