ExxonMobil forwards request to OVL to raise Sakhalin investment

Following a request from ExxonMobil, the operator of Russian oil field Sakhalin, ONGC Videsh, has decided to advance its investment of up to $ 2.35 bn in the ambitious project.

“ExxonMobil has informed us that they would like to advance certain investments apart from the earlier $ 1.7 mm in the phase one of project from that of the phase two to accelerate the development plan,” OVL chairman Subir Raha said, adding the proposal will soon come up before the board and any final view on will be taken later.
“As per preliminary data reports, there are indications of an increased estimates in the proposed production of the field and hence Exxon wants all the three partners to advance their investments,” Mr Raha said.

The chairman said OVL is aware of the escalation of its cash sink due to such a development and is confident that it will protect its internal rate of return.
“We expect higher IRR with increased production from Sakhalin,” Mr Raha asserted. OVL has purchased 20 % overseas equity in the project from Russian firm Rosneft in 2001. On the domestic front, Mr Raha said ONGC has lined up a Rs 3,000 crore investment in upgradation and introduction of new technologies for its exploration business.