ONGC Appoints PriceWaterhouseCooper as Advisor on Sakhalin 1
ONGC has appointed PriceWaterhouseCoopers to study options for marketing crude oil and natural gas from Sakhalin 1 field, offshore eastern Russia, a senior ONGC official said. "PriceWaterhouseCoopers will submit its report in the next 3-4 months after which we will decide what to do with the crude and gas yields from Sakhalin 1," said the official. Last year ONGC Videsh Ltd. acquired a 20% interest in the Sakhalin project for approximately US $1.7 billion. Their share from the Sakhalin venture is estimated to be approximately 2.5 million metric tons of crude per year.
According to the official, ONGC is exploring three options to manage its Russian output - shipping it to India, exchanging output with another company, or selling it directly to markets like Japan and Singapore. "We are at present examining which will be the most feasible of all the given options," said the official. Sakhalin 1 holds an estimated 2.5 billion barrels of oil and 425 billion cubic meters of natural gas.
ExxonMobil Corp. holds 30% of Sakhalin 1 and is the operator of the project. The Sodeco consortium of Japan holds 30% and the remaining 20% is held by Rosneft. Crude oil production from Sakhalin 1 is expected to begin around 2005, and gas output around 2007.