(EnergyAsia, April 2 2012, Monday) — Sakhalin Energy Investment Company Ltd said the Russian Federation and its Far Eastern region of Sakhalin have begun receiving their share of profit production under the Sakhalin-2 offshore oil and gas project from last month.

According to their production sharing agreement, production sharing started when the company had recovered all project expenses totalling US$24.5 billion.

For 2012, the company forecasts that Russia will receive US$500 million worth of production based on an oil price of US$100 a barrel. In addition, the Federation will also receive royalties and profit tax.

“Production sharing began ahead of plan. This is not only a result of favourable market conditions, but first of all result of efforts of the whole company and its employees in production optimisation which was constantly supported by our shareholders”, said Andrei Galaev, CEO of Sakhalin Energy.

Sakhalin Energy said that it transferred more than US$1.14 billion in taxes and other mandatory payments to various levels of government last year.

For the period from 1995 to 2011, the Sakhalin-2 project had transferred a total of US$3 billion to the Russian government. Over its lifespan, the project is expected to yield revenue exceeding US$100 billion for the government.

Sakhalin Energy Investment Company Ltd operates the Sakhalin-2 project that includes the Piltun-Astokhskoye oil field and the Lunskoye natural gas field off Sakhalin Island in the Okhotsk Sea, associated infrastructure onshore and Russia’s first liquefied natural gas (LNG) plant. Established in 1994, the company is owned by Russia’s Gazprom (50% + 1 share), Royal Dutch Shell (27.5% – 1 share), and Japan’s Mitsui and Co (12.5%) and Mitsubishi Corp (10%).