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Russian Energy Ministry rules out mothballing Sakhalin 1 Wells



YUZHNO-SAKHALINSK, Russia, (Sputnik) — Russia’s Energy Ministry plans to resume oil and gas production at the Sakhalin 1 project soon and rules out risks of its wells being mothballed amid the shutdown of production, Anton Rubtsov, the director of the ministry’s oil refining and gas complex department, said Thursday.

On Wednesday, Valery Limarenko, governor of Russia’s southeastern Sakhalin region, said the volume of oil and condensate production from the Russian-led Sakhalin-1 energy project had almost halved between January and July 2022, and that mining at the site had been stopped. . He added that the annual production will increase from 8.9 million tons to 4.2 million tons.

“No, we are not considering this option. We expect that the measures that are taken will lead to a rapid resumption of this important Russian project,” Rubtsov said when asked if the production stoppage would lead to the mothballing of wells.

He noted that the ministry had options for resuming production, adding that gas supply was now provided by the Sakhalin 2 project and Russian energy giant Gazprom.

The subsidiary of the American company ExxonMobil remains the operator of the Sakhalin-1 project and holds 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 at the project.

On August 3, ExxonMobil announced that it planned to transfer its operating activities on the project to another undisclosed legal entity. The other shareholders of the Sakhalin-1 project are the Japanese Sodeco with 30%, the Indian ONGC with 20% and the Russian Rosneft with 20%.

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