Sakhalin Region has virtually lost its revenues from offshore oil and gas projects. The region does not receive a single rouble from taxes being paid for gas extraction and only 5 per cent for oil extraction instead of 60 per cent, as was the case in 2002. This is the result of the federal legislation on the Ust-Balykskoye oilfield reducing the rate of allocations to the regional budget from oil and gas production [revenues].
The region's governor Ivan Malakhov has left for Moscow to meet Prime Minister Mikhail Fradkov, the regional administration's press centre said today. They will discuss the problem of tax revenues from the Sakhalin-1 and Sakhalin-2 projects.
Over the last two years the regional administration has appealed 15 times to the Russian government, State Duma and Ministry of Finance with requests to revise the tax distribution in Sakhalin's favour, but in vain.
Meanwhile, 25 per cent of people in Sakhalin and Kurils Islands have incomes below the subsistence level, with some 100,000 pensioners living below the poverty line.

Source: ITAR-TASS news agency, Moscow
BBC Monitoring