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The Sakhalin-1 oil project in Russia is back to producing its peak level of 200,000 barrels per day (bpd) of oil from zero, an Indian company that is part of the new venture operating the project has said.
ONGC Videsh, the overseas unit of Oil and Natural Gas Corporation Limited (ONGC), hopes to reclaim its 20% stake in the project soon after some “terms and conditions” are met, managing director Rajarshi Gupta said at a press conference as carried by Reuters.
The Sakhalin-1 oil project hasn’t produced much oil over the past year after the Russian invasion of Ukraine sparked an exodus of Western oil firms from the Russian energy sector.
Previously, the Sakhalin-1 oil project was operated by U.S. supermajor ExxonMobil, but Russia removed it from the operatorship position last year amid the company’s own total pullout from Russia.
Shortly after Russian troops entered Ukraine in February 2022, Exxon said it was going to pull out from Russia and make no more investments there.
Exxon had a 30-percent stake in Sakhalin-1, but in October 2022, Russian President Vladimir Putin signed a decree with which a new entity was set up to manage the operations of the Far East oil and gas project. The decree allowed the Russian government to distribute the stakes in the project and kick out foreign partners if they saw fit.
The Russian government authorized last November a transfer of a 20% stake in the new Sakhalin-1 operator to India’s ONGC Videsh Limited and 30% to SODECO, or Sakhalin Oil and Gas Development Co, which comprises Itochu, the conglomerate, Marubeni, and Japan Petroleum Exploration Co.
Russia also decided to let the Japanese firms keep their stake in the Sakhalin-1 oil project as Moscow reshuffled ownership of domestic oil and gas projects after a mass exodus of Western firms.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.