India has announced plans to boost oil and gas production and development at the Sakhalin-1 project in Russia’s Far East.
Moscow plans to nationalize the project by kicking out the American and Japanese shareholders, but will make an exception for the Indian public sector company ONGC Videsh Limited (OVL), which holds 20 percent of the shares.
Although the Russian state-owned company Rosneft will continue to have a majority stake, it is possible that more Indian entities will join and thus secure a sales market in India.
Sakhalin-1 is located off the coast of Sakhalin Island in the Russian Far East and comprises three offshore fields: Chayvo, Odoptu and Arkutun-Dagi.
Until recently, the project was operated by a Russian subsidiary of the US company Exxon Mobil, known as Exxon Neftegaz, which owns 30 percent of the shares.
In addition, the Russian state owns 20 percent, Japan’s Sodeco owns 30 percent and the remaining 20 percent are in the hands of India’s Videsh.
Sakhalin-1 is dedicated to exporting Sokol oil, while Sakhalin-2 specializes in liquefied natural gas. It is believed that the Indian OVL will ramp up the production of the Sakhalin-1 project relatively quickly owing to the contribution of its own technologies.
