Russian crude oil to reach India in Dec

New Delhi: State-run Oil and Natural Gas Corporation Ltd (ONGC) will ship its first ever crude oil from Russia's Sakhalin-I project to Mangalore in the first week of December and will sell two other cargoes to ExxonMobil of US.

"Our entitlement from Sakhalin-I is three parcels of 700,000 barrels each in October-December. The first cargo will be processed at ONGC's subsidiary Mangalore Refinery and Petrochemicals Ltd, while two other would be sold to ExxonMobil," a company official said.

The first parcel of 90,000 tonnes is expected at Mangalore port around December 2, he said.

ONGC Videsh Ltd (OVL), the overseas arm of ONGC, will get 2.4 million tonnes of crude in 2007 from Sakhalin-I in lieu of its 20 per cent stake in the project.

Sakhalin-I project will reach the peak rate of 12 million tonnes per year once a new onshore crude processing unit is commissioned in December.

Output from the Chayyo field being developed by the Sakhalin-I partners, will fall to 9 million tonnes in 2012, rise back to 12.5 million tonnes in 2014 and then decline once more after 2017 to as little as 6 million tonnes per year in 2023.

The official said the consortium was looking at commissioning the Odoptu field as well as Arkutun-Dagi field ahead of schedule to maintain the production. The current schedule provides for the Odoptu and Arkutun-Dagi fields to be put on line in 2009 and 2015, respectively.

Operator ExxonMobil has 30 per cent stake, while other partners include Japan's Sakhalin Oil and Gas Development Co (30 per cent) and Russian state-owned oil company Rosneft (20 per cent).

Sakhalin-I project includes Chayvo with reserves estimated at 152 million tonnes of crude and 208 billion cubic meters of gas; Odoptu with 75 million tonnes of crude and 70 bcm of gas and Arkutun-Dagi with 80 million tonnes of crude and 70 bcm of gas.

The official said production from the Sakhalin-I project could be increased by 1.2 to 1.4 million tonnes per year if the license area is expanded to north.

Operator ExxonMobil has asked the Russian government to expand its license area to include a new neighbouring deposit, the consortium discovered, but the authorities have decided to put the area up for auction, and said the existing production sharing agreement does not provide for an expansion of the license area.

Another smaller area, the Lebindinsky block close to Sakhalin-I, was auctioned off last month to Russia's Rosneft.

OVL, which has 24 properties in 14 countries, has till now only shipped part of its share from Greater Nile Oil Project in Sudan. It shipped 256,000 tonnes of crude oil from its Sudan property to India in 2005-06.

The company has 25 per cent stake in Greater Nile Oil Project in Sudan and is entitled to one-fourth of oil output from GNOP, but has shipped only a small quantity of its entitlement as Indian refiners have not expressed willingness to process Sudanese crude. OVL sells remaining of its share from GNOP in international market.