Inclusion of Northern Territories on PSA list expected to spur investment

Nov 13, 1999 01:00 AM

Members of Russia's Federation Council said that opening the Northern Territories concession up for development under a production-sharing agreement (PSA) would spur investment in the country.
They were speaking after the council approved legislation providing for the inclusion of the block on the Kremlin's official PSA list.
The Northern Territories project, which is to be carried out by Conoco of the United States and its Russian partners Arkhangelskgeoboldobycha (AGD) and LUKoil, is expected to require more than $ 3 billion in investments. Some $ 465 million of the total will be spent on pipeline construction since the block is located in an area that is not outfitted with oil transport facilities -- or, for that matter, other types of necessary social and industrial infrastructure.
The Russian government expects to collect $ 2.5 billion in revenues from the project, but the Komi republic's Nenets autonomous district will also derive particular benefit. Russian experts said last week that as much as 77% of all income earned from the Northern Territories project would remain in the Nenets district.
Additionally, the partners in the project will create thousands of jobs in the district and elsewhere -- both directly, by carrying out work at the concession, and indirectly, by purchasing Russian-made machinery and other goods.

Source: NewsBase
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