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The first phase of the Sakhalin-1 project began tapping the rich oil and gas reservoirs of offshore eastern Russia October 2005 by operator Exxon Neftegas Ltd. (ENL). Sakhalin-1 oil and gas resources were discovered in the 1970s, but technical and financial hurdles prevented development until 1995, when ExxonMobil joined and reached agreement with the Japanese Consortium Sodeco and Russia's state-run Rosneft affiliates to develop the fields.

The production-sharing agreement (PSA) for the Sakhalin-1 project became effective in June 1996.  In September 2000, the Sakhalin-1 project completed drilling and testing of the Chayvo 6 well.  This was the last well of a five-year exploration period, which included drilling of seven appraisal wells and acquisition of more than 1,200 sq km of 3D seismic data.  Appraisal work under the PSA along with prior exploration work conducted during the 1970-80s delineated Sakhalin-1 hydrocarbon resources totaling 2.3 Bbbl of oil and 17.1 Tcf of gas.

Prior to the effective date of the PSA, the Odoptu field had been identified in 1977 as holding potential oil and/or gas reserves; the Chayvo field in 1979; and the Arkutun-Dagi field in 1989. In 2001, the National Oil Co. of India, ONGC Videsh Ltd., joined the consortium. The Sakhalin-1 consortium declared the project commercial on Oct 29, 2001 and the Russian Federation approved the declaration on Dec. 3, 2001, which formally ended the exploration period and began the 20-year development period under the PSA

Sakhalin Pipe

Project specifications
ExxonMobil Exxon Neftegas Ltd. (30% interest) Partners    Japan's Sakhalin Oil and Gas Development Co. Ltd.-principal shareholders INOC, JAPEX, Itochu, and Marubeni (30%); Russia's Rosneft affiliates: RN-Astra (8.5%) and Sakhalinmorneftegas (SA4NG)Shelf (1 1.5%); and National Oil Co. of India, ONGC Videsh Ltd. (20%)
Discovery date    1970s

Fields    Chayvo, Odoptu, and Arkutun-Dagi
Sakhalin Island, situated along the eastern coastline of the Russian mainland, immediately north of the Japanese island Hokkaido, is 948 km (589 miles) long from north to south and 27 to 160 km (17 to 99 miles) wide from east to west.
Chayvo oil and gas field is located on the northeastern Sakhalin shelf on the Chayvo Bay latitude, 5 to 15 km off the Sea of Okhotsk shoreline.
Odoptu oil and gas field is located on the northeastern Sakhalin shelf on the Piltun Bay latitude, 6 to 10 km off the Sea of Okhotsk shoreline.

Country    Russia
First production    Oct. 1, 2005
Oil production    Chayvo: 50,000 b/d of oil by year-end 2005, 250,000 b/d by year-end 2006
Gas production    300 MMcf/d
Wells    Seven (four oil producers, two gas producers, and one injector)
Water depth    3 km
Reserves    2.3 Bbbl of oil, l7.l Tcf of gas
Field life    40 years

Project cost    $3 billion to date, $12 billion total capital investment forecast.  Project start-up was on schedule and within about 10% of unit development cost expectations.  Ranks as one of the largest single foreign direct investment projects in Russia today.
Winter Pipe laying
CLICK ON PICTURE LARGE  To date, seven ERD wells (four oil producers, two gas producers, and one injector) have been drilled at Chayvo and readied for initial production.  Chayvo 7,2 (11,134 m) and Z-1 (10,995 m) are the third - and fourth- longest ERD wells 4m the world, says ENL Z-2 is the longest ERD well ever drilled by ExxonMobil. Chayvo also claims the world's first 13 5/8in. casing installation using "mud over air" floatation and world record coiled tubing runs.
Once full production starts, crude oil will be processed at the Chayvo onshore processing facility (OPF) at the rate of about 250,000 b/d of oil and 800 MMcf/d of gas.  A 225-km export pipeline is being built from the OPF to the DeKastri export terminal.  Construction of the terminal is underway and scheduled for startup in 2Q 2006.<>

The terminal facilities will include the world's largest single point mooring system, which was installed about 7 km offshore near DeKastri in August 2005. With icebreaking support vessels and strengthened tankers, required because the strait between the mainland and the island is covered by ice for six months annually, year-round shipping will be possible.


In 2004, the Russian government approved the Technical and Economic Substantiation for Construction, which allowed Sakhahn-1 to start full-scale construction of the project facilities. To date, ExxonMobil has installed two drilling facilities in the first phase.  One is the Yastreb, the onshore rig, which uses extended-reach drilling to tap reserves 6 mi from shore.  The company has also set in place the Orlan platform, which sits right over the Chayvo reserve and will drill from there.

Technological triumphs
Yastreb is the world's largest land-based drilling rig - 22 stories tall - using extended-reach drilling (ERD).  It is the largest fully wintered (+40/-40' C) and most powerful rig in the industry, according to ENL, with 12,000 hp (about 9,000 KW), the rig includes four 1,600-hp mudpumps at 7,500 psi (about 500 bar).

It is skid mounted for batch drilling and seismic design and is designed to withstand earthquakes; ENL says the rig's mud system is also unique in the industry.  Compared with most rigs' 1,000 bbl capacity mud system, Yastreb has a 2,000 bbl active, a 2,000-bbl reserve, and a 5,000-bbl bulk storage system. The company adds that the rig has a pipe barn, which no other land rig has, which was designed to bring tubulars in, take them up, and store them. They can be picked up in 90-ft sections instead of 30-ft sections. Combined, Yastreb and Orlan, which will provide drilling capacity for up to 20 wells, will drill more than 30 ERD wells, which will be the largest number of such wells in any one location globally.