Sakhalin-1 Oil, Gas Production Less Than Half of Plan in 2022

Vladimir Soldatkin
Monday, February 27, 2023

Valery Limarenko, the governor of Russia's far eastern Sakhalin island, told President Vladimir Putin on Monday that oil and gas production at the Sakhalin-1 project was less than half of that planned in 2022. 

The project saw a sharp decline in output following the departure of U.S. oil and gas major ExxonMobil XOM.N after Moscow sent tens of thousands of troops into Ukraine on Feb. 24 last year. 

"First, in May, oil production was practically stopped, and in September, it was gas production. We lost a large amount, more than half, of the annual plan," Limarenko said at a televised meeting with Putin. 

Russia is trying to recover losses from the Exxon withdrawal and the local General Prosecutor's Office has been asking a court to recover 15.5 billion roubles ($220 million) in allegedly unpaid taxes from the company.

"Given that two-thirds of the (regional) budget consists of oil and gas taxes, we will lose about 50 (billion roubles, $663.6 million), 49 billion, according to our calculations. We will somehow get out, but this problem really exists," Limarenko told Putin. 

He had said in September that oil production of 4.2 million tonnes (84,000 barrels per day) was expected at the Sakhalin-1 project, down from a planned 8.9 million tonnes. An industry source told Reuters last month that Russia restored oil output at Sakhalin-1. 

Exxon took an impairment charge of $4.6 billion on its Russian activities in April. It also reduced local energy production and moved staff out of the country. 

Russia last year approved requests by 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 respective 20% and 30% stakes in the Sakhalin project. ($1 = 75.3500 roubles) 

(Reuters - Reporting by Vladimir Soldatkin / Editing by Gareth Jones and Louise Heavens)


Categories: Energy Activity Production Asia

Related Stories

Petronas Expands Suriname Portfolio with Deepwater Block Acquisition

Japanese Oil and Gas Firm Enters Two Blocks off Malaysia

MODEC and Terra Drone Renew FPSO Drone Inspection Partnership

Yinson Production Closes $1B Investment to Drive Further Growth

Petronas-Eni Upstream Joint Venture to Take Up to Two Years to Set Up

UK Firm Secures Exploration Extension for Two Blocks off Vietnam

CNOOC Starts Production at Offshore Field in South China Sea

Petrovietnam, Petronas Extend PSC for Offshore Block

INEOS Wraps Up Acquisition of CNOOC’s US Oil and Gas Assets

Shell Launches Next Phase of Malaysia's Deepwater Project with First Oil Production

Current News

Centrica and Thailand’s PTT Ink Long-Term LNG Supply Deal

Petrovietnam, Partners Sign PSC for Block Off Vietnam

Japan Protests China’s New Oil and Gas Construction Activities in East China Sea

CNOOC Signs Hydrocarbons Exploration and Production Deal with Kazakhstan

Thailand's PTT to Buy LNG from Glenfarne's Alaska LNG Project

Woodside and Jera Agree LNG Cargoes Supply for Japan’s Winter Period

Petronas Expands Suriname Portfolio with Deepwater Block Acquisition

Japanese Oil and Gas Firm Enters Two Blocks off Malaysia

Yinson Production, “K” LINE Target Europe's CCS with FSIU and LCO2 Solutions

Woodside Agrees Long-Term LNG Supply with Petronas Unit

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