PHOTO: PTI

DEEPENING TIES: Petroleum Minister Mani Shankar Aiyar (second from left) speaks on the occasion of maiden oil and gas production from Sakhalin-I oilfields in far-east Russia on Saturday.

SAKHALIN (RUSSIA): The gigantic Sakhalin-I fields in far east Russia, India's single largest investment abroad, began oil and gas production on Saturday.

Sakhalin-I field, where India's ONGC Videsh Ltd (OVL) has a 20 per cent stake, will produce 23,000 barrels of oil and about 58 million standard cubic feet of gas a day.

R. S. Butola, OVL Managing Director, and Steve Terni, President of Exxon Neftegas, the operator of Sakhalin-I, turned on the valve to start production.

Speaking on the occasion, Petroleum Minister Mani Shankar Aiyar said: "It is not usual for a company from a developing nation to be associated with such kind of a project. For us in India, Sakhalin-I is the beginning of a much longer and deeper association with the island on the east coast of Russia." Russian Minister of Industry and Energy Viktor Borisovich Khristenko said the project marked a new beginning.

Officials said oil production from Sakhalin-I field would rise to 50,000 barrels a day by April 2006 and hit the peak level of 250,000 barrels per day (bpd) by the end of 2006. Gas production would rise to 200 million standard cubic feet a day by next year.

OVL, the overseas arm of the Oil and Natural Gas Corporation, purchased a 20 per cent stake in Sakhalin-I project for $1.7 billion in 2001. In November, India approved $1.1 billion of additional investment in Sakhalin-I. ONGC Videsh plans to ship around 7 lakh barrels of oil from Sakhalin-I fields to India from April 2006.

The Sakhalin-I consortium, comprising Exxon Neftegas Ltd. (the operator)-30 per cent, Japanese Sodeco-30 per cent, Russian RN-Astra LLC-8.5 per cent, and Russian Sakhalinmorneftegaz-Shelf-11.5 per cent, has already hired five ice class tankers on a long-term charter. Tankers would be delivered next year and OVL would hire one of these to transport its share of output to India.

— PTI

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