Exxon Mobil Invests in Sakhalin   2 comments

exxonmobil_logoThe Sakhalin regional government announced that a group led by U.S. ExxonMobil will invest about $2 billion into Russia’s Sakhalin-1 oil and gas project this year.

Gazprom has long said it needs the gas produced at Sakahlin-1 to cover domestic needs, while Exxon plans to export the fuel to China.

Exxon operates the $12 billion project along with Russian state oil firm Rosneft, Japan’s Itochu, Marubeni Japan National Oil and India’s ONGC.

Sakhalin-1 works under a production sharing agreement (PSA), which gives investors tax stability but makes it subject to special regulations. Any increase in spending delays and reduces the government’s income from the project.

The project has been producing oil for several years and reached peak production of 11.2 million tonnes in 2007.

It has been producing gas since 2005 and shipping small volumes to continental Russia. It signed a separate deal to supply China with 8 billion cubic metres of gas a year and hoped to start supplies next decade.

Gazprom, the world’s largest gas producer, itself has a rival plan to supply China from East Siberia via two links. It wants to buy gas from Sakhalin-1 at market prices but talks have been stalled for over a year due to a price disagreement.

Gazprom co-leads Sakhalin-2, a neighbouring project from Sakhalin-1, and liquefies all of the gas produced there.

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2 responses to “Exxon Mobil Invests in Sakhalin

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  1. Pingback: Global Warming? « Larry Sarner and Pseudoscience

  2. Pingback: Jean Mercer: Censorship Conspiracy! « Sapphire Truth

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