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No threat of well mothballing due to production suspension under Sakhalin 1 project

The Ministry of Energy of the Russian Federation expects the resumption of oil and gas production at the project in the near future

YUZHO-SAKHALINSK, September 29. /TASS/. There is no threat of well mothballing due to the suspension of oil and gas production under the Sakhalin 1 project and the Russian energy ministry hopes for the soonest resumption of the project, Anton Rubtsov, director of the ministry’s oil and gas processing department, said on Thursday.

"No, we don’t consider such an option. We hope that the actions that are being taken to lead to the soonest resumption of this important Russian project," he told journalists on the sidelines of the Sakhalin Oil and Gas forum.

According to Rubtsov, the ministry is working jointly with companies on that matter. "As you know, gas is gas is produced under Sakhalin 2. Gas will also come from Gazprom. There is understanding about options of launching this project (Sakhalin 1 - TASS)," he explained.

Governor of Russia’s Far Eastern Sakhalin region, Valery Limarenko, said earlier that Exxon Neftegaz Limited had produced nearly half as much oil and condensate under the Sakhalin 1 project in the seven months of 2022 as compared with the same period last year. The year’s output is expected to be 4.2 million tonnes, versus the original plan of 8.9 million tonnes. As of now, production has been suspended. The governor also said it is also expected that gas production will also decrease, as its production was suspended from September 16.

ExxonMobil said in March it was withdrawing from the Sakhalin 1 projects and was recalling its American employees from oil and gas projects in Russia. The company said in August it was transferring its share in Sakhalin 1 to another party, not naming it however.

Another participant in the project, Rosneft, said back then that Exxon had begun phased production shutdown from April 26 without agreement with other participants in the project. Production was practically stopped in mid-May.

Sakhalin 1 operator, Exxon Neftergaz, an ExxonMobil subsidiary, owns 30% Rosneft holds a 20% stake, Japan’s Sodeco has am 30-percent share, and India’s ONGC Videsh holds 20%.