RUSSIA: Environmental watchdog launches probe into Sakhalin-1

A commission at Russia's environmental watchdog in the Far Eastern Federal District has launched a probe into the Sakhalin-1 oil and gas project, a commission spokesman said Friday.

The project, which is operated under a production-sharing agreement (PSA) by Exxon Neftegas Limited, a subsidiary of U.S. oil major Exxon, is located on Sakhalin Island's northeastern shelf and is expected to bring in around $52.2 billion to the Russian budget by 2054, when it is scheduled to end.

Russia's environmental watchdog (Rosprirodnadzor) said last December it will begin an inspection of Sakhalin-1 in January 2007, raising concerns that it too will face the problems its Shell-led sister-project, Sakhalin II, has been facing since September 2006.

"Following documentation checks, commission members will inspect all Sakhalin-1 facilities from oil wells to oil terminals," said Pyotr Titkov, head of Rosprirodnadzor's regional department, who leads the commission. "The check on Sakhalin will last from March 30 through April 30, and will be extended if required," he said.

Titkov said 22 inspectors from Moscow, Khabarovsk and Yuzhno-Sakhalinsk would investigate the project's compliance with environmental legislation and mineral laws.

The Sakhalin-1 operator was blasted last year by the Russian financial regulator, the Audit Chamber, for serious violations of its production-sharing agreement (PSA) and Russia's Land Code.

The consortium is developing the Chaivo, Odoptu and Arkutun-Dagi deposits, with recoverable reserves estimated at 2.3 billion barrels of oil and 485 billion cubic meters (17.1 trillion cubic feet) of natural gas.

Apart from the U.S. company, which owns 30%, the Sakhalin-1 international consortium comprises Russia's state-owned Rosneft (20%), India's ONGC (20%), and Japan's SODECO (30%).


Russian News and Information Agency