Exxon Neftegas Ltd to invest $70 mln in Russia

Manager of Sakhalin-1, the largest project with direct foreign investments, Exxon Neftegas Limited (ENL) intends to invest in Russia $70 million as part of the project's realization.

"These funds are allocated for construction works on drilling sites Chaivo and Odoptu," reads the company's statement released in Vladivostok. The work will be conducted by the joint Russian-American company "Sakhalinmorneftemontazh Alaska Projects" /SMNMAP/.

"The placement of the contract with SMNMAP increases the already high volume of works given to Russian contractors within the framework of the contracts with total cost of approximately $1.7 billion," said the project's executive director Steve Terni.

Sakhalin-1 is the largest project in Russia with direct foreign investments. It envisages "development from the scratch" of fields Chaivo, Odoptu and Artutun-Dagi.

The recoverable resources of these fields equal approximately 2.3 billion barrels of oil and 485 billion cubic meters of gas.

Oil production on the Chaivo field is to start at the end of 2003 with the expected production level of 250,000 barrels per 24 hours.

Besides Exxon Neftegaz Limited, whose share in the project totals 30 per cent, the Sakhalin-1 consortium comprises Japanese Salkhalin Oil and Gas Development Co. /30 per cent/, Indian Videsh Ltd. /20 per cent/ and two Russian companies, Sakhalinmorneftegas-Shelf and RN-Astra /11.5 and 8.5 per cent respectively/.