No forecasts

Exxon Mobile is afraid to predict production volumes at Sakhalin-1

The American Exxon Mobile, which is the operator of Sakhalin-1, summing up the first results of this year, stated that the project has reached a net profit. However, the company refuses to disclose the financial details of its implementation, as well as the details of its negotiations with Gazprom on the supply of gas from the fields to the Sakhalin-Vladivostok-Khabarovsk pipeline, which is strategically important for the Russian monopoly . As the consortium unofficially said, the operator is simply afraid to voice its plans because of possible problems with officials: when the company gave forecast figures at the beginning of the year, supervisory authorities showed unprecedented activity in checking the terms of compliance with the license. In general, the head of Exxon Mobile, James Taylor, assessed the experience of working in Russia very positively and noted that his company would like to participate in new projects, for example, as an investor, both onshore and offshore.

Representatives of all companies included in the consortium for the development of Sakhalin-1 (Exxon Neftegaz Ltd. owns 30%, Indian ONGC - 20%, Rosneft - 20% and Japanese SODECO - 30%), at the end of last week talked about his successes. Mr. Taylor announced that the project, which cost about $7.1 billion to implement, has turned a net profit since the summer. This brought the Russian budget 28 billion rubles in the form of royalties and the state’s share in oil and gas production, 5 billion of which remained in the budget of the Sakhalin region. Tax payments by the Russian Rosneft, according to the general director of its subsidiary Sakhalin Projects, Lev Brodsky, amounted to $220 million. The implementation of Sakhalin-1, as Mr. Taylor said, is proceeding according to plans: this year about 9.2 million tons. Mr. Taylor refused to say what the company expects for next year, saying that it is a “trade secret.” According to him, if the project estimate is agreed upon, the company plans to begin drilling at the Odoptu field next year in order to begin production in 2011. Another large field, Arkutun-Dagi, should be developed by 2013.

At the same time, Mr. Taylor did not talk about the prospects for the sale of gas produced at Sakhalin-1, which Gazprom claims, but for which the Chinese CNPC is ready to pay more, limiting himself to the routine phrase that “the main thing in resolving this issue is remains the profitability of gas sales.” In the meantime, associated gas from Sakhalin-1 is supplied to the Khabarovsk Territory under a long-term contract concluded in 2005. According to Mr. Brodsky, the cost of a thousand cubic meters is 70-80 dollars, and the consortium has plans to double the supply from the current 1-1.5 billion cubic meters per year.

Representatives of Gazprom did not develop the topic of gas from Sakhalin-1 at the conference “Oil and Gas of Sakhalin”, although they talked about its supplies to the Sakhalin-Vladivostok-Khabarovsk pipeline, the capacity of which in 2011 should be 10 billion cubic meters per year and subsequently increased to 30 billion, almost as if it were a fait accompli. “It will mainly be filled with gas from the Sakhalin-1 fields, and later from the Kirinsky, East Odoptinsky and Ayashsky blocks (recently transferred to Gazprom from the unallocated fund. - Ed. ),” said the head of the department coordination of Gazprom's eastern projects by Viktor Timoshilov, who was never able to confirm the existence of such agreements with the consortium developing Sakhalin-1. Therefore, the prospect of gasification of the Primorsky Territory by the APEC summit in 2012 seems to remain very vague. At the same time, according to Mr. Timoshilov, the concern expects to begin production at the Kirinskoye field, whose reserves are estimated at 70 billion cubic meters of gas, only in 2014.

True, Gazprom can count on additional volumes of gas if the state share in Sakhalin-1 and Sakhalin-2 is obtained by gas. Mr. Timoshilov believes that “this would be the right decision.” “There is a demand for gas in the region that cannot be fully satisfied by existing resources. Therefore, why should the state receive money and then spend it on buying gas?” - he said.

Kirill MELNIKOV, Yuzhno-Sakhalinsk - Moscow