Sakhalin-1 hits first-phase production peak

Exxon Neftegas Ltd., operator of the Sakhalin-1 project off eastern Russia, has reached its targeted first-phase peak production rate of 250,000 b/d of oil.

Feb 22nd, 2007

By OGJ editors
HOUSTON, Feb. 22 -- Exxon Neftegas Ltd., operator of the Sakhalin-1 project off eastern Russia, has reached its targeted first-phase peak production rate of 250,000 b/d of oil.

The first phase of the Sakhalin-1 project includes the Chayvo field onshore processing facility and a 140-mile pipeline, which transports crude west across Sakhalin Island and the Tatar Strait to the DeKastri terminal in the Russian Far East.

The project's natural gas production for the 2007 peak winter season has been 140 MMcfd and is being marketed to two domestic customers in the Khabarovsk Krai.

Consisting of three offshore fields�Chayvo, Odoptu, and Arkutun Dagi�the Sakhalin-1 project, over its life, will provide Russia with direct revenues of more than $50 billion. The Russian content of contracts awarded to date for the Sakhalin-1 project exceeds $3.6 billion.

The project's future phases of development are expected to sustain export gas production from all three fields to 2050.

Exxon Neftegas has a 30% interest in the project. Partners are affiliates of Rosneft�RN-Astra 8.5%, Sakhalinmorneftegas-Shelf 11.5%; Japan's Sakhalin Oil & Gas Development Co. Ltd. 30%; and India's ONGC Videsh Ltd. 20%.

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