Russia's Sakhalin-1 Close to Full Oil Production after Exxon Exit

Nidhi Verma
Monday, January 9, 2023

Russia has restored oil output at its Sakhalin-1 project after struggling with production following the exit of its previous operator Exxon Mobil Corp due to sanctions, an industry source said.

Oil output from Russia's Sakhalin-1 project has recovered to 140,000-150,000 barrels per day (bpd), about 65% of the capacity and will soon hit full level of about 220,000 bpd, an industry source familiar with the matter said on Monday.

Sakhalin-1 output collapsed after Exxon issued force majeure and abandoned the offshore project due to Western sanctions.

Western countries and their allies imposed various sanctions on Russia after Moscow sent its troops to Ukraine for a "special military operation" in February last year. Moscow retaliated by blocking foreign investors' assets, seizing them in some cases.

Oil output of Sakhalin-1 is expected to reach near the peak level of about 200,000-220,000 bpd in "three to four weeks,"  said the source, who declined to be named as he is not authorized to speak to media.

Russia has established a new entity, managed by a Rosneft subsidiary, that owns investor's rights in Sakhalin-1 after the exit of ExxonMobil.

Russia last year approved requests of India's ONGC Videsh, the overseas investment arm of state-run Oil and Natural Gas Corp, and Sakhalin Oil and Gas Development Co (SODECO), a consortium of Japanese firms, to retain their 20% and 30% stake respectively, in the project.

This source said the new entity, in which Indian and Japanese investors have a stake, had sought views from the partners on new ways to operate the project.

This source also said India's ONGC is unlikely to get any parcel of Sokol crude, produced from Sakhalin-1, in this fiscal year to March 2023.

Rosneft did not immediately reply to a request for comment.

(Reuters - Reporting by Nidhi Verma; editing by David Evans)


Categories: Energy Industry News Activity Production Asia Pacific

Related Stories

OMV Exits Ghasha Gas Project off UAE with Lukoil Stake Sale

China's Sinopec Laucnhes $690M Hydrogen Venture Capital Funds

CIP, ACEN Partner Up for First Large-Scale Offshore Wind Farm in Philippines

Velesto’s Jack-Up Rig Up for Drilling Job Offshore Vietnam

ABS Greenlights SHI’s Multi-Purpose Deepwater LNG Floating Unit

CNOOC Puts Into Production New Oil Field in South China Sea

Woodside to Shed Some Trinidad and Tobago Assets for $206M

CNOOC Sees 11% Profit Growth in 2024 Driven by Record Oil Production

CNOOC Brings Online Second Phase of Luda Oil Field Project in Bohai Sea

ONGC and BP Sign Deal to Boost Production at India's Largest Offshore Oil Field

Current News

OMV Exits Ghasha Gas Project off UAE with Lukoil Stake Sale

China's Sinopec Laucnhes $690M Hydrogen Venture Capital Funds

CIP, ACEN Partner Up for First Large-Scale Offshore Wind Farm in Philippines

Valeura Concludes Eight-Well Drilling Campaign in Gulf of Thailand

Three Dead in Chevron's Angolan Oil Patform Fire

BW Opal FPSO Vessel set for Work off Australia

Keyfield Ventures into Indonesia’s Oil and Gas Market with New Partner

Fire Contained at Vietnamese Oil Platform Undergoing Decommissioning (Video)

Velesto’s Jack-Up Rig Set for Drilling Job off Indonesia

Petronas, Inpex Secure Oil and Gas Exploration Rights off Indonesia

Subscribe for AOG Digital E‑News

AOG Digital E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week

https://accounts.newwavemedia.com