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Ministry Happy With Sakhalin-1 and -2 Environmental Performance

Posted on: Monday, 19 September 2005, 21:00 CDT

YUZHNO-SAKHALINSK. Sept 19 (Interfax) - The Russian Natural Resources Ministry is satisfied by Western companies' observance of environmental requirements for the Sakhalin-1 and Sakhalin-2 projects, Yury Trutnev, the natural resources minister, said in Yuzhno-Sakhalinsk.

"We are entirely satisfied with the observance of environmental requirements for the Sakhalin-2 and Sakhalin-2 projects," Trutnev said. "You can either listen to what companies are saying at presentations in Moscow or so and see for your self - there's a big difference," said Trutnev, who chairs an inter-departmental commission on the Russian shelf.

Trutnev also said an auction for the Sakhalin-3 project would take place in the first half of 2006.

He said the federal budget set aside 52 million rubles for exploration at fields off the coasts of the Sakhalin and Kuril islands this year. "That amount will be increased in future," Trutnev said.

Trutnev also said that Exxon Neftegas Limited, which operates the Sakhalin-1 project, was asking the resources ministry to expand the Chayvo field's limits.

"They [Exxon Neftegas] have found another 75 million tonnes next to Chayvo during exploration.

Trutnev said the company would have to make a formal request and submit its geological findings for appraisal to prove that the new reserves are part of the Chayvo field.

"But problems could arise in this situation and a new tender might have to be called," he said.

Sakhalin-1 involves the development of the Chayvo, Odoptu and Arkutun-Dagi fields off Sakhalin's northeastern coast with initial reserves of around 307 million tonnes oil and 485 billion cubic meters (bcm) gas. Capital expenditures on the development of all three fields are estimated at more than $12 billion. Exxon Neftegas Limited and SODECO each own a 30%-interest in the Sakhalin-1 consortium, and Rosneft and ONGC each own 20%.

The Sakhalin-2 project involves the development of the Piltun- Astokhskoye and Lunskoye fields off the Sakhalin coast. Total reserves of oil and gas at these deposits amount to 150 million tonnes and 500 bcm, respectively. The operator of the project is Sakhalin Energy, founded by Royal Dutch/Shell (55%), Mitsui (25%) and Mitsubishi (20%). Shell and Gazprom agreed on July 7 to exchange 25% plus one share in Sakhalin Energy for 50% of the Zapolyarnoye- neocomian joint venture.

The Sakhalin-3 will be for the development of the East-Odoptu block with probable reserves of 70 million tonnes oil and 30 bcm gas; Ayashsky block with 97 million tonnes oil and 37 bcm gas; and Kirnsky block with 453 million tonnes oil, 700 bcm gas and 53 million tonnes gas condensate.

Source: Daily News Bulletin; Moscow - English

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