OVL eyes stake in Sakhalin-3, to go through bidding route

The first shipment of crude oil from the Sakhalin-I oil and gas field in Russia was received by Petroleum Minister Murli Deora on Saturday at the New Mangalore Port Trust complex here.

The first shipment of crude oil from the Sakhalin-I oil and gas field in Russia was received by Petroleum Minister Murli Deora on Saturday at the New Mangalore Port Trust complex here.

The consignment of 92,055 metric tonnes (672,000 barrels) of Sokol crude was ferried on board the Russian ship MK Viktortitov — the oil tanker of Primorsk Shipping Company on a charter of ONGC Videsh Ltd (OVL). The tanker set sail from Dekastri port in Russia Nov 14. The company will ship second cargo by the month-end.

OVL has 20 per cent stake in Sakhalin-1, acquired from two subsidiaries of Russian government oil firm Rosnett — SMNG-S and Rosneft-S.

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OVL is now eyeing a stake in the prestigious Sakhalin-3 field in Russia. However, official sources disclosed that as against the earlier practice of securing oil and gas properties in Russia through the negotiations route, OVL will have to go through the bidding route to secure oil and gas properties in Russia.

Officials confirmed that getting a slice of equity in Russian oil and gas properties through the negotiations route seems a tricky situation now. As a result, OVL has already initiated discussions with Russian oil and gas majors–Rosneft and Gazprom for putting in a joint bid for acquiring a stake in Sakhalin-3 project.

The total recoverable oil and gas reserves from Sakhalin-1 are 2.3 billion barrels of oil and 17 tcf of gas. The total investment commitment by the consortia partners of Sakhalin-1 project stands at a whopping $12.8 billion by 2013. Of this, OVL’s share stand at 20 per cent.

OVL was the first company to commit an investment as high as $1.7 billion in Russia’s Sakhalin-1 in 2001 for a 20 per cent stake in the project. This investment went up to $2.7 billion and included a $1.2 billion loan to Russian energy major-Rosneft.

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“OVL made all possible efforts to secure equity in Russian oil and gas properties in lieu of this loan component but there was little response from the Russian side on this proposal of OVL. Rosneft has in August this year returned this $1.2 billion loan to OVL,” officials said.

Stating that Sakhalin to Mangalore, a new silk route, a route of more than 5700 nautical miles, is the new route of integration, Deora said India plans to get more oil and gas from Russia as part of its efforts to diversify sources of energy.

ExxonMobil holds 30 per cent in Sakhalin-I, with the remaining equity owned by Russia’s Rosneft (20 per cent) and Japan’s Sakhalin Oil and Gas Development Co (30 per cent). It is currently producing around 50,000 barrels per day.