Russia's Energy Ministry Ruling Out Mothballing Of Sakhalin 1 Wells - Department Head

YUZHNO-SAKHALINSK (Pakistan Point News / Sputnik - 29th September, 2022) SAKHALINSK, Russia, September 29 (Sputnik) - The Russian Ministry of Energy expects to resume production of oil and gas at the Sakhalin 1 project soon and is ruling out risks of mothballing its wells amid the shutdown of the production, Anton Rubtsov, the director of Oil Refining and Gas Complex Department of the ministry, said on Thursday.

On Wednesday, Valery Limarenko, the governor of Russia's southeastern region of Sakhalin, said that the volume of oil and condensate production at the Russia-led energy project Sakhalin-1 had almost halved from January-July 2022, and extraction at the site was stopped. He added that the annual production will drop from 8.9 million tonnes to 4.2 million tonnes.

"No, we are not considering this option. We expect that the actions that are being taken will lead to a quick resumption on this important Russian project," Rubtsov said when asked whether the shutdown of the production would lead to the mothballing of wells.

He noted that the ministry has options for the resumption of production, adding that now gas supplies are secured by the Sakhalin 2 project and Russian energy giant Gazprom.

US company ExxonMobil's subsidiary remains to be the operator of the Sakhalin-1 project and owns 30% of the shares. In March, the company announced its intention to withdraw from the project and declared force majeure in April, significantly reducing oil and gas production in the project.

On August 3, ExxonMobil announced that it was planning to transfer its operating activities on the project to another, undisclosed legal entity. Other Sakhalin-1 project's shareholders are Japan's Sodeco with 30%, India's ONGC with 20%, and Russia's Rosneft with 20%.