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21 Sept. 2018

Sakhalin-1 Reaches 100 Million Ton Crude Shipping Milestone

In August 2018, Sakhalin-1 reached 100 million tons of crude export since the production start-up in 2005, resulting in significant economic benefits to the region.

Sakhalin-1 includes three oil and gas license blocks – Chayvo, Odoptu, and Arkutun Dagi – which are located off the northeast coast of Sakhalin Island in the Russian Far East. Chayvo began production in 2005, Odoptu followed in 2010, and Arkutun-Dagi streamed in 2015. Today, all of these fields produce oil and gas from two onshore well sites and two offshore platforms.

Exxon Neftegas Limited has consistently demonstrated industry leading performance by operating the Sakhalin-1 license safely in challenging conditions. Using two offshore and onshore drilling rigs that are among the most powerful in the oil and gas industry, ENL has drilled nine of the 10 longest extended reach wells in the world. Sakhalin-1 pioneered year-round crude transportation by using a fleet of specially designed double-hull tankers to navigate the ice fields and winter conditions of the Russian Far East, with assistance from ice breaking escort vessels. Sakhalin-1 also built and operates the Berkut platform, which is the largest offshore facility in Russia.

This technological leadership has allowed Sakhalin-1 to generate multiple benefits for local communities, the Russian State and stakeholders. Sakhalin-1 has paid more than $15 billion in revenue to Russia in tax, royalties and the state’s share of production, including more than $6.2 billion paid to the Sakhalin Oblast. The Sakhalin-1 Consortium has awarded contracts valued at more than $16 billion to Russian companies and joint ventures, and provided $250 million to modernize infrastructure at Sakhalin Oblast and Khabarovsk Krai. Improvements include road reconstruction throughout Sakhalin Island, new bridges, upgrades to the Nogliki airport, renovations to regional hospitals in Okha and Nogliki, and many other projects.

The Consortium has also donated more than $31 million in charitable contributions to support local communities and indigenous people in education, healthcare, culture and sports through a number of projects including, but not limited to:

  • A long-term partnership with the regional children's hospital and the regional cancer center to support the purchase of advanced medical equipment and training of medical personnel;
  • A major multi-year math and science program in cooperation with Sakhalin State University to establish the Technical Oil and Gas Institute;
  • Providing funds to the Sakhalin State University to purchase equipment, including training technical complexes, simulators, labs and other educational equipment, as well as lectures from leading Russian and international university professors to local students;
  • The annual Eureka – Path to Success program to support children talented in math and science;
  • The annual Teacher of the Year competition which recognizes the most experienced and skillful education professionals;
  • New technology education equipment sets to teach robotics in Sakhalin schools;
  • Traditional festivals of Indigenous People, Feeding the Spirit - Master of the Sea and Kuray, the reindeer herders’ festival, and project for preservation of languages, unique traditions, and the culture of the Sakhalin indigenous minority peoples;
  • Annual children soccer tournament Leather Ball;
  • Skis to school – purchase of winter sports equipment to Sakhalin schools, and many others.

Sakhalin-1 is owned by an international consortium, which includes the affiliates of the Russian state company Rosneft – RN-Astra (8.5 percent) and Sakhalinmorneftegas-Shelf (11.5 percent); Japanese SODECO (30 percent); the Indian state oil company, ONGC Videsh Ltd., (20 percent); and Exxon Neftegas Limited (30 percent), the Sakhalin-1 operator.

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