The Ministry of Energy spoke about the work of the Sakhalin-1 project

VLADIVOSTOK, 7 Sep — PRIME. The Ministry of Energy of the Russian Federation wants oil production at Sakhalin-1 to recover before the end of the year: ExxonMobil’s position on this issue causes difficulties, but the ministry believes that a solution will be found, Energy Minister Nikolai Shulginov told reporters.

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“On Sakhalin-1, oil production has almost stopped, gas production continues. We will try to make this project work. But a lot depends on the position of Exxon, since this company is the operator. There are difficulties, but we believe that some that decision,” Shulginov said at a briefing at the WEF on Wednesday.

“We would like to see oil production at Sakhalin-1 restored by the end of the year,” the minister added.

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The decree of the President of the Russian Federation Vladimir Putin, published on August 5, banned until the end of 2022 transactions with shares owned by persons from unfriendly countries in strategic companies of the Russian Federation and their subsidiaries, in the Sakhalin-1 project and the Kharyaginskoye field, in important subsoil user companies, in companies serving the Russian fuel and energy complex, as well as in Russian banks according to the list established by the president.

The Wall Street Journal reported at the end of August, citing ExxonMobil spokesman Casey Norton, that the American company recently sent a notice of disagreement to the Russian government due to the impossibility of withdrawing from the Sakhalin-1 project due to the effect of a new decree of the President of the Russian Federation and is already “taking steps to file a claim”, as it believes that the issue is unlikely to be resolved in the meantime.

The ExxonMobil subsidiary remains the operator of the Sakhalin-1 project and owns a 30% stake in it. In March, she announced her intention to withdraw from the project, and in April she announced the introduction of a force majeure regime. Rosneft, which owns a 20% stake in Sakhalin-1, reported that due to the actions of the American company, production on it was practically stopped. On August 3, ExxonMobil said it was working on transferring its operating activities for the project to another, unnamed legal entity. Also, the shareholders of Sakhalin-1 are the Japanese Sodeco (30%) and the Indian ONGC (20%).

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Shulginov also noted that the department is counting on the participation of Novatek as a shareholder in the operator of the Sakhalin-2 project.

On June 30, Russian President Vladimir Putin signed a decree in connection with the unfriendly actions of foreign states, which ordered to change the operator of the Sakhalin-2 project to a new, Russian legal entity. In the former operator, Sakhalin Energy, Gazprom owned 50% plus one share, Shell 27.5% minus one share, Mitsui 12.5%, Mitsubishi 10%. Shell announced in September that it would not participate in the new operator.

The head of Novatek, Leonid Mikhelson, said that Novatek is interested in participating in the Sakhalin-2 project, but the company will ask the Russian government to conduct its own audit of the project before making a decision.

The WEF takes place on September 5-8 on the campus of the Far Eastern Federal University on Russky Island in Vladivostok. RIA Novosti acts as the general media partner of the forum.

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