ExxonMobil filed a complaint with international arbitrators in Sweden on Thursday against the Russian government, claiming it overpaid $500 million in taxes tied to its Sakahlin-1 project.
The company said its subsidiary, Exxon Neftegas, has been overpaying its value added tax (VAT) for the Sakahlin-1 production sharing agreement for the past six years, the Russian Times said.
The Russian government lowered the VAT tax rate to 20 percent from 35 percent in 2008.
Exxon has argued it should be reimbursed for half of the amount it overpaid, about $250 million, and has asked that all future VAT payments be set at the revised 20 percent level.
The Russian government is reportedly working on a response to the complaint and would like to settle the matter out of court, Russian newspaper Vedomosti said.
Exxon holds a 30 percent operating stake in Sakhalin-1, located off the northeast coast of Sakhalin Island in the Russian Far East.
Japan’s Sodeco holds a 30 percent stake and India’s ONGC holds a 20 percent interest.
The project, composed of three fields, produces over 200,000 barrels per day.
The company started production at the project’s third field, Arkutun-Dagi, in January.
Western sanctions against Russia forced ExxonMobil to halt work at its $600 million Kara Sea joint venture project with Russia’s Rosneft last October.