24 Dec 2010 10:32

Sakhalin-2 project should move into black by 2013 - Sakhalin governor

YUZHNO-SAKHALINSK. Dec 24 (Interfax) - About $26 billion has been invested in the Sakhalin-2 project since its inception, and expectations are that it will start turning a profit in 2013, Sakhalinsk regional Governor Alexander Khoroshavin told Interfax.

"Much of [the money] has been recovered, there remains $14 billion. We're planning that the project will start making a profit in 2013," Khoroshavin said. Plans call for Sakhalin-2 to produce about 16 million tonnes of oil and 25.5 billion cubic meters (bcm) of gas in 2011, he said.

Meanwhile, Sakhalin-2 and Sakalin-1 operating companies have submitted their expense sheets for 2011 to the government for coordination.

"Expenses of $1.5 billion in 2011 have been submitted for Sakhalin-1, and $3.3 billion for Sakhalin-2," Khorovashin said.

"But what the authorized government agencies will approve is a big question," he said.

Exxon Neftegas Ltd. has told Interfax that a working group comprised of authorized agencies has already begun examining the expense projections. One source expressed the hope that the group will this time confirm costs for 2011 in a more compressed timeframe than was the case with expenses for this year.