Temporary drop in Sakhalin-1 production possible - Rosneft
Russian oil company does not rule out that, as a result of a refusal by the Russian Natural Resource Ministry to expand the boundaries of the Sakhalin-1 license zone, there may be a risk of a temporary drop in production - of up to 10% - for the first few years of the project," Lev Brodsky, general director of Rosneft subsidiary Sakhalin Projects, told Interfax.
"In general, no significant changes are expected in the level of production compared with the planned levels. The risks of a temporary drop in production was discussed in connection with the lack of a Natural Resource Ministry decision to expand the boundaries of the Chayvo field," he said. This expansion would involve including the northern section of the Chayvo field into the license zone.
"In the long-term this will not results in significant changes in production and the economic effectiveness of Sakhalin-1, as oil reserves in the northern section only account for an insignificant share of overall reserves. However, they are within the reach of the Yastreb onshore drilling unit, and the development plan and drilling program, which may now have to be changed, involved their recovery first," Brodsky said.
At the moment the Sakhalin-1 consortium is not planning to drill a significant number of additional wells and increase one cost of the project.
He said that work to maintain oil production levels is being carried out in two areas: by optimizing the schedule for the implementation of subsequent stages of the project, including the development of the Odoptu and Akrutun-Dagi fields and the planned drilling of several additional wells instead of the wells in the technological plan for the development of the northern part of the Chayvo field that has been confirmed by the state. "It is premature to speak of details, until the situation is clarified with the expansion of
the field's boundaries and the agreeing of amendments to the technical development plan," the general director said.
He also said that the full-scale Sakhalin-1 development and oil exports would start on schedule at the end of 2006 - start of 2007.
"Full-scale production and exports of oil will depend not on the situation with the terminal in De Kastri, but on the launch of an onshore treatment complex in Chayvo. All of the work on this complex is progressing to schedule. The project's operator is effectively cooperating with regulatory bodies to deal with recommendations connected with the De Kastri terminal, and we are sure that this situation will not have a significant influence on the consortium's current production and export plans," he said.
According to project operator Exxon Neftegas Limited, with the launch of the onshore complex oil production should increase to 30,000 tonnes per day. It is expected that daily oil exports will amount to
250,000 barrels of Sokol oil. Tankers will be shipped once every three
to four days. Each member of the consortium will sell oil on its own behalf.
Sakhalin-1 early production began in the third quarter 2005. The oil export system was launched at the start of September this year, and an oil terminal was launched at the port of De Kastri on October 4. The
first tanker should be loaded soon.
Sakhalin-1 participants are: Exxon Neftegaz Limited (30%), ONGC (20%), Rosneft (20%) and SODECO (30%).
"In general, no significant changes are expected in the level of production compared with the planned levels. The risks of a temporary drop in production was discussed in connection with the lack of a Natural Resource Ministry decision to expand the boundaries of the Chayvo field," he said. This expansion would involve including the northern section of the Chayvo field into the license zone.
"In the long-term this will not results in significant changes in production and the economic effectiveness of Sakhalin-1, as oil reserves in the northern section only account for an insignificant share of overall reserves. However, they are within the reach of the Yastreb onshore drilling unit, and the development plan and drilling program, which may now have to be changed, involved their recovery first," Brodsky said.
At the moment the Sakhalin-1 consortium is not planning to drill a significant number of additional wells and increase one cost of the project.
He said that work to maintain oil production levels is being carried out in two areas: by optimizing the schedule for the implementation of subsequent stages of the project, including the development of the Odoptu and Akrutun-Dagi fields and the planned drilling of several additional wells instead of the wells in the technological plan for the development of the northern part of the Chayvo field that has been confirmed by the state. "It is premature to speak of details, until the situation is clarified with the expansion of
the field's boundaries and the agreeing of amendments to the technical development plan," the general director said.
He also said that the full-scale Sakhalin-1 development and oil exports would start on schedule at the end of 2006 - start of 2007.
"Full-scale production and exports of oil will depend not on the situation with the terminal in De Kastri, but on the launch of an onshore treatment complex in Chayvo. All of the work on this complex is progressing to schedule. The project's operator is effectively cooperating with regulatory bodies to deal with recommendations connected with the De Kastri terminal, and we are sure that this situation will not have a significant influence on the consortium's current production and export plans," he said.
According to project operator Exxon Neftegas Limited, with the launch of the onshore complex oil production should increase to 30,000 tonnes per day. It is expected that daily oil exports will amount to
250,000 barrels of Sokol oil. Tankers will be shipped once every three
to four days. Each member of the consortium will sell oil on its own behalf.
Sakhalin-1 early production began in the third quarter 2005. The oil export system was launched at the start of September this year, and an oil terminal was launched at the port of De Kastri on October 4. The
first tanker should be loaded soon.
Sakhalin-1 participants are: Exxon Neftegaz Limited (30%), ONGC (20%), Rosneft (20%) and SODECO (30%).
