Oil and Gas production at Sakhalin commences todayMani Shankar Aiyar and Russian energy Minister witness tap opening ceremony
Sakhalin-1 oil and gas project in Russia started oil and gas flow at it first oilfield Chayvo today in the presence of visiting Indian Petroleum Minister Shri Mani Shankar Aiyar and Russian Energy Minister Viktor Khristenko.
Speaking at the event Shri Aiyar described this as an important development in the annals of long lasting friendly relationship between India and Russia. He said that his visit to the remote far east areas of Russia is also significant as India has its largest investment overseas in this project. This also marks an important achievement towards securing India's energy security as production from the field is expected to last for over 30 years. OVL is holding 20 percent equity in the project and proposes to make about 2.8 billion US dollars investment, when the project is slated to be fully developed in 2006.
The Minister said that we would like take the entire Indian share of crude oil produced from the Sakhalin-1 project to India and the issues relating gas sales would be settled by the consortium after due consideration various aspects. The initial production of crude oil is be around 23,000 barrels a day and gas production of 58 million cubic feet per day, which will be gradually raised to 250,000 barrels a day and three billion cubic meters respectively. A 225 KMs pipeline will be built from Chayvo to the De-kastri export terminal for the sale of crude oil. Considered as the biggest foreign project in Russia, the Sakhalin-1 consortium plans to develop the Odoptu and Arkutun Dagi oilfields later to maintain the production plateau. The Sakhalin-1 fields are estimated to contain 2.3 billion barrels of oil (307 million tons) and 17 trillion cubic feet of gas (485 billion cubic meters). The area comprises three offshore fields off the East Coast of Sakhalin Island in the Sea of Okhotsk.
The Sakhalin-1 Consortium members are Exxon Neftegas Limited (30 percent interest, operator), the Japanese company Sakhalin Oil and Gas Development Co., Ltd. (30 percent), India's ONGC Videsh Ltd. (20%) and two Russian companies, Sakhalinmorneftegas-Shelf (11.5%) and Roseneft, the remaiing 8.5 percent. OVL joined the consortium in 2001 with an initial investment commitment of US$1.7 billions which was later enhanced by US$1.1 billions in November 2004.
Earlier Shri Aiyar had a one to one meeting with his Russian counterpart in which two ministers resolved to further enhance cooperation between the two nations in oil and gas sector particularly with regard to Indian participation in the Russian exploration and production sector, joint participation in other countries and the Russian companies taking part in the opportunities available in Indian hydrocarbon sector. During the meeting Russian Minister confirmed his participation in the roundtable meet of major North and Central Asian oil selling countries and major Asian buyers, to be held in New Delhi in November this year.
RCJ/Sakhalin-Russia/01-10-2005