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Rosneft's Sokol Crude Oil Tender Shows Sakhalin-1 Output Recovering

October 25, 2022

Credit: Rosneft
Credit: Rosneft

Russia's top oil producer Rosneft has issued a tender to sell six cargoes of Sokol crude for loading in November to early December in a sign that output from the Sakhalin-1 project may be recovering following the departure of ExxonMobil, sources said, and tender documents reviewed by Reuters showed. 

ExxonMobil, the former operator of the Sakhalin-1 project on Sakhalin Island in Russia's far east, said earlier this month it had exited Russia, including the Sakhalin-1 facility. 

The tender to sell Sokol crude, produced at the Sakhalin-1 project, followed the creation of a new Russian government-controlled company to take over operations from ExxonMobil.

By July, output at the Sakhalin-1 project had fallen to 10,000 barrels per day (bpd), from 220,000 bpd before Russia invaded Ukraine. Russia calls its actions in Ukraine a special military operation. The new Russian entity, managed by Rosneft subsidiary RN-Sakhalinmorneftegaz-shelf, plans to restore oil output levels on Sakhalin-1 shortly, two Russian oil industry sources said.

Rosneft did not immediately answer a Reuters request for comment. The Russian Energy Ministry declined to comment. 

In the Sokol tender, Rosneft is offering six cargoes of 95,000 tonnes each for loading from Russia's De Kastri oil terminal on the country's east coast on Nov. 2-7, 8-13, 14-19, 19-24, 25-30 and Nov 29-Dec 4. 

The tender closes on Oct. 31. The tender marks the first time since April that Sakhalin-1 is expected to load more than one cargo of Sokol in a single month. Normal loadings were previously at around 10 cargoes per month, traders said. 

Rosneft also offered two Sokol cargoes of 95,000 tonnes each last week for loading on Oct. 20-31, three traders said. The tender closed on Oct. 17, but the results are not known. 

The Victor Konetsky tanker is currently waiting in the De Kastri terminal for oil loading on Oct. 29, shipping data in Refinitiv Eikon shows. Rosneft also issued a spot tender to sell two cargoes of ESPO Blend oil, loading from Far East port of Kozmino on Dec. 5-15 and 16-26, traders said. The tender also closes on Oct. 31. 

Based on documents for the tenders, Rosneft offered buyers the cargoes on terms of full prepayment in roubles, but if this was not possible the buyer could pay in either U.S. dollars or yuan.

 "Russia wants to send a clear message to market that they are back even though the volumes are lower than usual," a crude oil trader based in Asia said. 

(Reuters - Reporting by Florence Tan, Muyu Xu and Reuters reporters; Editing by Kirsten Donovan and Jane Merriman)



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