Sakhalin-I oil to be exported to Japan in 2005

Oct 31, 2001 01:00 AM

The group that is developing the Sakhalin-I offshore concession is expected to start exporting most of its oil output to Japan in December of 2005. By that time, Japanese sources close to the project told, the Chaivo field should be yielding some 250,000 bpd of crude.
The sources did not say exactly what percentage of the oil from Chaivo would go to Japan. They did say, though, that a formal announcement on oil export plans would be made soon, perhaps by November 1. SODECO (Sakhalin Oil and Gas Development Co), the Japanese consortium set up for the Sakhalin-I project, did not confirm these reports.
Representatives of Exxon Neftegas, the US company that is serving as operator of the project, said in June that the partners will sell their output all over the world. Yet if the Sakhalin-I group does send most of the output from Chaivo to Japan, Russian oil will account for about 6 % of all crude imported into the country.

Industry experts were saying, meanwhile, that oil from Chaivo would probably be transported by tanker. This goes against a statement made in June by a spokesman for Itochu, which is a member of SODECO, to the effect that a pipeline might be built to carry crude from Sakhalin Island to Japan.
Equity in the Sakhalin-I concession was until earlier this year split as follows: 17 % to Rosneft, which is fully owned by the Russian government, and 23 % to Sakhalinmorneftegaz, a subsidiary of Rosneft; 30 % to Exxon Neftegas, a subsidiary of the US giant ExxonMobil; and 30 % to SODECO, which groups several Japanese conglomerates, including Itochu and Marubeni.
Rosneft decided to sell part of its stake in 1998 because it was not always able to make contribute to the project's budget on time or in the required amounts. After negotiations with several potential investors, it decided last year to sell a 20 % interest in the project -- half of the combined 40 % stake owned by Rosneft and Sakhalinmorneftegaz -- to ONGC-Videsh, India's state oil and gas company. ONGC-Videsh has agreedto pay a lump sum of $ 225 mm for the stake and compensate Rosneft for $ 90 mm worth of previous outlays on the project.

Development of the Arkutun-Dagi, Chaivo and Odoptu fields may require up to $ 12 bn over the 42-year life of the project. The Sakhalin-I group's three offshore fields are believed to contain about 341 mm tons of crude oil and 425 bn cm of natural gas, according to Russian government data.

Source: NewsBase
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