The Sakhalin-1 Project Celebrates 25 Years

ExxonMobil, together with Consortium partners SODECO, Rosneft, and Sakhalinmorneftegas-Shelf (and, as of 2001, ONGC Videsh), signed the Sakhalin-1 project Production Sharing Agreement on June 30, 1995.

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The Sakhalin-1 Project Celebrates 25 Years
June 30, 1995, the Sakhalin-1 project Production Sharing Agreement signing

This marked the beginning of one of the largest foreign direct investment projects in Russia. The Sakhalin-1 project implementation required the use of the most advanced technologies, and multiple industry records were set as a result of the search for the most effective solutions with respect to project economics and environmental protection.

After additional exploration and confirmation of reserves, the first Sakhalin-1 production wells were drilled at the offshore Chayvo field in 2003 using the powerful land-based Yastreb rig, and early oil production began in 2005. In 2010, the Odoptu field was put on stream, and 5 years later, in 2015, first oil flowed from the Berkut platform in the Arkutun-Dagi field. Currently, all of the Sakhalin-1 license blocks are producing.

The Sakhalin-1 project has achieved a number of milestones over the last 25 years:

  • The planned peak production rate of 34 thousand tons per day was achieved shortly after the start of development – in 2007. A peak is usually followed by a production decline, but Sakhalin-1 reached a new peak of 41 thousand tons per day in 2018! This was made possible by the phased field development, geotechnical measures, and numerous innovative engineering solutions.
  • Sakhalin-1 is the world record holder for extended reach wells: 8 of the 10 longest wells in the world were drilled here, including the longest O-5 well (15 thousand meters) at the Chayvo field. The project uses four of the most powerful drilling rigs in the world.
  • Sakhalin-1 was the first project in Russia to implement year-round oil delivery by tankers, including in winter when the sea is covered with ice. Specially built Aframax-class tankers with a double hull and a cargo capacity of 100 thousand tons are used to transport the oil.
  • Tankers are loaded using one of the world's largest single point mooring facilities: it rises 60 meters above sea level, while the sea depth at the installation site is about 22 meters. It is fully automated and remotely controlled.
  • The Arkutun-Dagi field is being developed from the Berkut platform – the largest in Russia, weighing around 200 thousand tons of reinforced concrete substructure and topsides.
  • More than 1,200 tankers have been loaded with 123.5 million tons of oil, and over 28 billion cubic meters of natural gas have been delivered to consumers in the Russian Far East.

The Sakhalin-1 project has also proven to be a reliable partner in the communities where it operates, providing numerous direct and indirect benefits.

  • Production activities have brought more than 18.3 billion USD into the budgets of the Russian Federation on various levels, including 7.6 billion USD into the budget of the Sakhalin Oblast.
  • Russian contractors and joint ventures have been awarded contracts with the total value exceeding 16 billion USD, which accounts for about 70% of all contract operations.
  • During the project implementation, 230 million USD was invested in upgrading necessary infrastructure facilities that are also actively used by local residents: roads, bridges, hospitals, clinics, the Nogliki airport, the De-Kastri power plant, and many others.
  • Members of the Sakhalin-1 Consortium have supported more than 1,600 charity projects totaling about 37 million USD, helping to implement social initiatives.
  • It was with Sakhalin-1 project financial support that the Technical Oil and Gas Institute of the Sakhalin State University was founded.  Since 2017, its graduates have been receiving a second diploma from the Gubkin National University of Oil and Gas. The total amount of charity contributions in education, including those related to projects for children of school and preschool age, has reached 17 million USD.
  • Healthcare facilities in Sakhalin and in the Ulchi district of Khabarovsk Krai have received a total of 8 million USD, which has been used to upgrade medical equipment, purchase supplies, provide advanced training for physicians, and for many other beneficial projects. Our partners in long-term healthcare programs are the Sakhalin Regional Oncology Center, the Sakhalin Regional Children's Hospital, the hospital in the village of De-Kastri, the South-Sakhalin City Hospital, the Central District Hospitals in Okha and Nogliki.
  • Industrial safety and occupational health performance of the Sakhalin-1 project is among the best in the world.  All project personnel regularly undergo necessary training and instruction, without which work permits are not granted.
  • Programs for monitoring the state of the environment and researching rare animal species have allowed the Sakhalin-1 project to protect the unique nature of Sakhalin. For example, a number of scientific discoveries have been made thanks to a gray whale research program that has been ongoing since 1997. Scientific research data formed the basis of the Marine Mammal Protection Plan, which is used during production activities Currently, scientists record a steady 2 to 5 percent increase in the number of gray whales observed near Sakhalin.

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