US Exxon to pump $1.3 bln in Sakhalin-I next year

Moscow, Oct 23 (UNI) US Exxon Mobil, the operator of the Sakhalin-I hydrocarbon project off Russia's Pacific coast has proposed to spend 1.293 billion dollars in 2007 in the project, which is 307 million dollars less as compared to last year, the administration of the Far Eastern island said today.

Sakhalin Region Governor Ivan Malakhov is currently on a visit to the United States to discuss amendments to the operating programme and budget of the Exxon Mobil-led energy project for 2006, as well as next year's programme and budget.

''Differences have surfaced concerning the spending,'' RIA Novosti news agency quoted the administration as saying.

Capital investment in the development of the Sakhalin-I deposits have reached more than 12 billion dollars, about eight billion dollars less than for Royal Dutch Shell-led Sakhalin II, a sister production-sharing agreement (PSA) project that has been plagued by problems in recent months.

But the consortium running the project, which apart from Exxon Neftegas Ltd includes Russia's state-controlled Rosneft (20 per cent), ONGC (20 per cent), and Japan's Sodeco (30 per cent), has increased investment to 17 billion dollars. The figure has not been approved so far.

The consortium is developing the Arkutun-Dagi, Odoptu, and Chaivo deposits on the island's northeastern shelf, with recoverable reserves estimated at 2.3 billion barrels of oil and 484 billion cubic metres of natural gas.

Crude production was launched in October 2005 and reached around 44,100 barrels per day as of early 2006.

Supplies to Asian Pacific countries began after a new onshore terminal in De-Kastri in the Khabarovsk territory, the largest in Russia's Far East, was launched in October.

UNI XC DKS RAI2058