5 Apr 2023 16:43

Deadline for selling unclaimed stake of foreigners in Sakhalin 1 extended until October - decree

MOSCOW. April 5 (Interfax) - The deadline for selling the unclaimed stake of foreign partners in the new operator of the Sakhalin 1 project has been extended until October 2023.

Russian President Vladimir Putin on April 5 signed a decree to amend Decree No. 723, dated October 7, 2022, which had set the deadline for selling stakes at four months, thereby extending the period to one year from the date of the document's issuance. The document has been posted on the government's official internet portal for legal information.

President Vladimir Putin signed an order in October, according to which the project's previous operator, Exxon Neftegas Ltd. which had completely halted production by October, was replaced by a Russian LLC. The new operator, Sakhalin-1 LLC was registered in Yuzhno-Sakhalinsk, with the company Sakhalinmorneftegaz-Shelf acting as the sole executive body.

Sakhalinmorneftegaz-Shelf received 11.5% in the company's charter capital in proportion to its stake in the production-sharing agreement, and another 8.5% is managed by JSC RN-Astra. The foreign PSA participants had one month to confirm their consent to receive their pro-rata stakes in the new operator. Japan's SODECO (30%) and India's ONGC (20%) did so, while Exxon Mobil (30%) said it had decided to terminate its participation and fully withdraw from Russia.

In accordance with the decree, the "rejected" stake is to be valued and sold to a Russian legal entity that meets the criteria defined by the Russian government.

Sakhalin-1 includes three oil and gas fields: Chaivo, Odoptu and Arkutun-Dagi off the northeast coast of Sakhalin Island. Their combined reserves are estimated at 307 million tonnes of oil and 485 billion cubic meters of natural gas, and annual production amounts to 11.3 million tonnes of oil.