Sakhalin-1

Sakhalin-1 is the first large-scale shelf development project in Russian being implemented under a production sharing agreement (concluded in 1996).

Project participation:

• Rosneft — 20%
• ExxonMobil — 30%
• Sodeco — 30%
• ONGC — 20%

The project envisages the development of the Chaivo, Odoptu, and Arkutun-Dagi fields on the north-eastern Sakhalin shelf in the Okhotsk Sea. In 1996—2001, the project participants carried out comprehensive exploration activities at these fields, clarified their structure, and obtained more precise data on the volume of hydrocarbon reserves.

According to DeGolyer & MacNaughton, as of December 31, 2008 proved oil and gas reserves of Sakhalin-1 were 330 mln barrels and 43.7 bcm, respectively.

In 2002, the project joint venture began constructing core infrastructure facilities for Sakhalin-1. Field development is being carried out in several stages.

At the first stage the project partners began the development of the Chaivo field in 2005 and plan to start the development of the Odoptu field in 2011. At the second stage (2014), the partners plan to start developing gas reserves at the Chaivo field. The third stage, which is also expected to start in 2014, involves the development of Arkutun-Dagi’s oil reserves. The Sakhalin-1 project will run through 2040—2050.

Commercial production within Sakhalin-1 began at the Chaivo field in late 2005. In 2006, the project joint venture commissioned an oil pipeline (connecting Chaivo and De-Kastri), onshore oil treatment facilities, and an export terminal at De-Kastri, which began shipments to Japan and South Korea in October 2006. The Sakhalin-1 gas is supplied to local consumers via a pipeline owned by Daltransgaz.

Sakhalin-1 reached its peak capacity in Q1 2007. In 2008, Sakhalin-1 produced 9.6 mln tonnes (70.4 mln barrels) of crude oil, with Rosneft’s net share (after royalty and the state share) being 1.63 mln tonnes (11.9 mln barrels) which is 19% lower compared with 2007. The decrease in net share was due to lowering of production in accordance with the project implementation schedule as well as due to the increase in state share in line with the PSA terms.

Sakhalin-1 reserves (Rosneft’s 20% share, PRMS, DeGolyer & MacNaughton, as of December 31, 2008)

Sakhalin-1 hydrocarbon production (100%)

Rosneft’s net share in Sakhalin-1 hydrocarbon production

Sakhalin-1 operating highlights