ROYAL DUTCH TO LAUNCH RUSSIAN ACTIVITY; MOSCOW TO OPEN SAKHALIN AREAS TO BIDS
Oct. 5, 1992
Units of the Royal Dutch/Shell Group are poised to take a role in the Russian petroleum industry.
Shell Development Sakhalin BV agreed to join the MMM group conducting a feasibility study for development of Piltun-Astokhskoye and Lunskoye oil and gas fields off Sakhalin Island.
And Shell Rossiya AO was registered in Moscow to operate upstream and downstream.
Meantime, Moscow's ITAR-TASS news agency last week reported Russia will take international bids for exploration and development onshore and off Sakhalin Island.
Membership interests for the Sakhalin Island feasibility study will be Marathon Oil Co. and Mitsui & Co. 30% each and McDermott International Inc. and Shell Development 20% each. Marathon will remain operator.
The MMM combine was awarded the study late last March by the Russian federation. Since then, MMM, along with PO Sakhalinmorneftegas and representatives of the Sakhalin Island administration, have been engaged in a study of technical, commercial, and financial aspects of developing the two offshore fields.
The group recently drilled an appraisal well in each of the fields.
Findings from the study are to be submitted by the end of this year. Appropriate government bodies will then review the results and make a final decision on whether to commit to development.
Victor G. Beghini, president of Marathon, expressed confidence the four companies will be awarded development rights.
Shell Rossiya plans to acquire ownership in products trading conducted by Royal Dutch/Shell companies and operate in Russian oil and gas exploration and development, as well as processing, distribution, and sales of petroleum products.
Longer term, it may enter production of chemicals, coal, and metals.
Russian Acting Prime Minister Yegor Gaidar signed an order Sept. 26 opening Sakhalin Island's onshore and offshore areas to international tenders for exploration and development.
ITAR-TASS said Gaidar told appropriate Russian ministries and departments to submit within 2 weeks their choices of acreage to be offered for bids and regulations for the tender commission and its makeup.
The order contains an instruction "to envisage the utmost use of the Russian industrial potential, local labor, materials, and services in requirements to foreign participants in the tender."
The document cites the need to "observe the interests of Russia and the Sakhalin region during the tender." It also requires deliveries of natural gas, oil, and condensate to meet the requirements of the Sakhalin region, the Khabarovsk and maritime territories, "taking into account the hard currency recoupment of projects to be sent for tender."
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