14 Nov 2022 17:08

SODECO, ONGC decide to stay in Sakhalin 1 project, Russia approves their participation in new operator

MOSCOW. Nov 14 (Interfax) - The Russian government has approved the participation of Japan's Sakhalin Oil and Gas Development Co., Ltd. (SODECO) and India's ONGC Videsh Limited in the new Russian operator of the Sakhalin 1 project, according to the corresponding instructions issued by Prime Minister Mikhail Mishustin and reviewed by Interfax.

According to the instructions, SODECO has informed of its agreement to assume ownership of 30% in the Russian Sakhalin 1 LLC in proportion to the stake in the project as developed under the terms and conditions of the production sharing agreement, and ONGC Videsh Limited is to assume ownership of 20% in the project under the same terms.

Exxon Neftegas Ltd declared a force majeure in April and started reducing oil production at the Sakhaklin-1 PSA project. The company said in August that it was transferring the company's rights under the PSA project to an unnamed third party. The new project operator, Sakhalin-1 LLC, registered in Yuzhno-Sakhalinsk, was created on October 14 in keeping with a decree by Russian President Vladimir Putin. JSC Sakhalinmorneftegaz-Shelf, the sole executive body, received 11.5% in the company's authorized capital in proportion to its stake in the PSA, and another 8.5% is managed by JSC RN-Astra. The foreign participants' 80% stake, of which 30% belongs to Exxon Mobil , 30% - SODECO and 20% - ONGC, is on the balance sheet of the LLC itself, and foreign companies had a month to confirm their consent to receive their proportional shares in the new operator.

Sakhalin-1 includes three oil and gas fields offshore Sakhalin, namely Odoptu, Chayvo and Arkutun-Dagi, all on the northeastern shelf.

It has estimated reserves of 307 million tonnes of oil and 485 billion cubic meters of natural gas. The project's annual oil production is at 11.3 million tonnes.

SODECO pareticiants are Japex, the Japanese government, Itochu, Marubeni and Inpex.