SAKHALIN-1

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Context: India’s state-run Oil and Natural Gas Corp (ONGC) has announced a major recovery in its oil production from the Sakhalin-1 project in Russia. The company said that the output from the project has resumed to its normal level of around 200,000 barrels per day (bpd), as per a presentation made by its officials.

Details

• ONGC also expressed confidence that it will be able to retain its 20% stake in the Sakhalin-1 project.
• The company’s managing director of ONGC Videsh, the overseas investment arm of ONGC, said that the company is waiting for some ‘terms and conditions’ to be fulfilled by the new Russian operator of the project, Rosneft, before it can reclaim its stake.

ONGC Videsh

• ONGC Videsh is one of the largest foreign investors in Russia’s oil and gas sector, with stakes in several projects including Vankorneft, which owns the giant Vankor field and the North Vankor licence.
• ONGC Videsh is also exploring opportunities in other countries, such as Guyana, where it is studying the recent changes in the terms announced by the government for its latest exploration and licensing round.
• ONGC Videsh has a presence in Venezuela, where it holds a 40% stake in the San Cristobal project in the Orinoco heavy oil belt. However, due to US sanctions on Venezuela’s oil sector, ONGC Videsh has not been able to receive its dividend from the project for several years.

ONGC

• ONGC Videsh’s parent company ONGC has also set an ambitious target of becoming a net-zero carbon emitter by 2038, as part of its commitment to environmental sustainability.
• ONGC is India’s largest oil and gas producer and contributes about 70% of the country’s domestic production. The company is also diversifying into renewable energy sources such as solar and wind power.

Sakhalin-1 project in Russia

• The Sakhalin-1 project in Russia is one of the largest oil and gas projects in the world, involving three offshore fields in the Okhotsk Sea: Chayvo, Odoptu and Arkutun-Dagi.
• The project is operated by a consortium of international companies, including ExxonMobil, ONGC Videsh, SODECO and Rosneft.
• The project has been producing oil since 2005 and gas since 2009, using innovative technologies such as extended-reach drilling and subsea pipelines.
• The project has achieved several world records, such as the longest horizontal well and the largest single-phase offshore pipeline.

Challenges

• The project has also faced some challenges, such as geopolitical tensions, environmental concerns and technical difficulties.
• In 2022, Russia removed ExxonMobil from the operatorship position amid its conflict with Ukraine and appointed a new operator.

Recent updates 

• In May 2023, ONGC Videsh announced that the oil output from the Sakhalin-1 project had bounced back to its peak level of about 200,000 barrels per day (bpd). The company also said that it was not in a hurry to repatriate its pending dividend from the project and could consider reinvesting it.

Conclusion

• The Sakhalin-1 project is an example of successful international cooperation and technological innovation in the energy sector. The project contributes to the energy security and economic development of Russia and its partners, as well as to the global energy supply.

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India-Russia Relations: https://www.iasgyan.in/daily-current-affairs/india-russia-relations-1

PRACTICE QUESTION Q. The Sakhalin-1 project is one of the largest oil and gas projects in the world. It is located in which country?  A) Japan B) China C) Russia D) Vietnam Answer:  C

 

https://www.businessworld.in/article/Russia-s-Sakhalin-1-Oil-Output-Returns-To-Its-Peak-Of-200-000-Bpd-ONGC/29-05-2023-478386/