Rosneft announced an almost complete halt of production at Sakhalin-1

Oil production at the Sakhalin-1 project has been practically stopped since May 15 after the project operator, the American ExxonMobil, unilaterally began to gradually stop production from April 26, the press service of Rosneft reported. The tanks of the De-Kastri project terminal are 95% full, oil is not shipped from them, the company added.

So “Rosneftresponded to ExxonMobil’s statement to Reuters that the company is in the process of transferring its 30% stake in the Sakhalin-1 operator. Rosneft noted that the company has no information about ExxonMobil’s decisions to transfer the operator’s function to another company. “The Government of the Russian Federation, the Ministry of Energy and the Government of the Sakhalin Region, together with other project shareholders, are making efforts to restore production activities at the Sakhalin-1 project. Despite this, unfortunately, production activity on the project has not been restored at the moment, ”the press service added.

Sakhalin-1 is one of the largest Russian offshore production projects, which is being developed under production sharing agreements. Four fields are being developed within the framework of the project: Chayvo, Odoptu-Sea, Arkutun-Dagi and Lebedinskoye. Rosneft owns 20% in the project, ExxonMobil 30%, Japanese Sodeco 30%, and Indian ONGC Videsh 20%. The project operator is Exxon Neftegaz Limited.

On July 7, Deputy Prime Minister and Plenipotentiary Representative of the President in the Far Eastern Federal District Yury Trutnev announced the reduction in production at Sakhalin-1. According to him, production at the project decreased by 22 times due to the restrictions imposed, to 10,000 barrels per day. He noted that the stoppage of production will affect the budget of the Sakhalin region, the entire Far East and Russia. “In 2023, up to 38 billion rubles will not be received. This is 26% of the region’s own income in 2022,” Trutnev said.