ONGC to take 20 % stake in Russian oil and gas fields at Sakhalin-I

The ONGC will invest around $ 1.2 bn for taking 20 % stake in Russian oil and gas fields at Sakhalin-I, likely to be developed by 2002. Petroleum minister Ram Naik said ONGC's overseas subsidiary -- ONGC Videsh Ltd (OVL) -- has signed a protocol of agreement with Rosneft, the national oil company of Russia for taking half of the 40 % stake held by it in Sakhalin project. Officials confirmed that the amount to be invested by OVL in acquiring 20 % stake in the project would amount to around $ 1.2 bn.
Exploration is likely to be completed by middle of next year and development would begin soon after, sources said adding the Russian Far-East (RFE) Sakhalin oil field is estimated to have 2-8 bn barrels of oil reserves. Russian oil company, Rosneft-Sakhalin Morneftegaz holds 40 % stake in the $ 4 bn project while Japanese Sodeco and ExxonMobil of US have 30 % each. The consortium of Rosneft-Sodeco and ExxonMobil have already invested $ 200 mm on evaluation of drilling and seismic operations.

The Sakhalin-1 consortium of Rosneft-Sodeco and Exxon have already invested $ 200 mm on evaluation of drilling and seismic operations. Mr Naik said ONGC's investment in Russian oil field would be taken to the cabinet committee on economic affairs (CCEA). The oil production from the field is expected to be around 8-12 mm tpy and that of gas production to about 20-30 mm cmpd. The Sakhalin-I project would focus on the development of the Arkutun-dagi, chaivo and odoptu fields, which range from 20 metres to 600 metres in depth, and are located off the eastern coast of Sakhalin island.