Royal Dutch/Shell Group is vigorously negotiating a joint venture to develop a deep, high pressure gas/condensate play in the Urengoi region of the Russian Federation.
Shell also is a bidder to develop oil and gas reserves off the Russian island of Sakhalin.
Three other projects, including an existing oil field with acute environmental problems, are In preliminary stages of study by the company.
Shell said it is interested in every aspect of exploration and production in the U.S.S.R. with the exception of exploration in virgin areas.
URENGOI DEAL
Negotiations on the Urgengoi project have been in progress for some time with Gazprom and local producing associations.
Shell said that it hopes to sign an agreement over development during first half 1992.
The project would probably get under way with a pilot operation costing $50-100 million.
Shell expects to have access to condensate from the field and possibly gas.
Transport systems are also currently under investigation.
SAKHALIN UPDATE
In Sakhalin, Shell International and partners Showa Shell, Mitsubishi, and Nissho Iwai, are waiting for local and Russian authorities to announce successful bidders for a feasibility study to develop offshore oil and gas reserves.
The bidding process has been delayed by local demands for foreign companies to include development of local infrastructure in the bids.
Shell estimates development could cost $5-10 billion and include either a two train liquefied natural gas export terminal or a gas pipeline to Japan. There are sufficient gas reserves for a three train LNG operation.
In the competitive bidding process, Shell is competing with Exxon Corp./the Japanese group Sodeco, Mitsui/Marathon/McDermott, BHP/Amoco and Korean interests, and Mobil acting alone. The Japanese company Idemitsu is thought to have dropped out of the action.
Companies were originally asked to bid on development of two offshore reservoirs, but Shell said it understands some companies have offered to include additional structures in their bids.
The feasibility study is expected to take 18 months and first production would not be seen until the second half of the decade.
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