Russian Far East Holds Huge Resource Potential

About this report...Investment in the Russian Far East remains lukewarm, despite the area`s tremendous resource potential. Not only are foreign investors cautious, but economic and political problems throughout Russia continue to hamper economic development.Nevertheless, the Sakhalin-II consortium, consisting of Marathon Sakhalin Ltd., Mitsui Sakhalin Development Co. Ltd., Shell Sakhalin Holdings B.V., and Diamond Gas Sakhalin B.V. (Mitsubishi), will become the first group this month to achieve production under terms of a Russian production sharing agreement (PSA).Yet Sakhalin gas-pipeline economics continue to suffer, with Gazprom losing an estimated $13/1,000 cu m. Unfortunately, the Ru...

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