“We invite companies from China and India to projects of the energy complex. This is a good chance for them to fill the niche vacated by American and European companies in the oil and gas services market,” Sakhalin governor Valery Limarenko recently announced on his website. Located in the Pacific, Sakhalin is Russia’s biggest island.
ONGC Videsh (OVL) has a 20% stake in the Sakhalin-1 oilfields for over a decade now, and Moscow has been encouraging New Delhi to increase its stakes following the departure of ExxonMobil and Shell in the wake of the Russia-Ukraine conflict. It also wants India to invest in Sakhalin-2 gas field.
Sakhalin-1 is a large, offshore oil and gas field in Russia’s far east, spread over 1,140 square km and including Chayvo, Odoptu and Arkutun-Dagi fields. OVL acquired stake in the project in July 2001.
Almost all of Sakhalin-1’s oil production is shipped to international markets via the De-Kastri terminal, located in the Khabarovsk region on the Russian mainland and linked to Sakhalin-1 via a dedicated pipeline.
On October 7, 2022, the Russian President issued a decree, consequent to which the rights and obligations of the consortium under the Sakhalin-1 production sharing agreement (PSA) were transferred to a new company – Sakhalin-1 Limited Liability Company.
OVL and Rosneft each own 20% in this new company, while Sodeco has 30%. Tokyo-based Sakhalin Oil and Gas Development Co (Sodeco) is owned by the Japanese government and the private sector.
Following the collapse of the Soviet Union in 1991 and subsequent economic liberalisation, Sakhalin has experienced an oil boom, with extensive petroleum exploration and mining. The reserves contain an estimated 14 billion barrels of oil and 96 trillion cubic feet of gas.
