BALTIC CONSTRUCTION COMPANY AWARDED CONTRACT TO UPGRADE NOGLIKI - OKHA MOTOR ROAD
Exxon Neftegas Limited (ENL), operator for the Sakhalin-1 Consortium, announced today that Baltic Construction Company, a Russian company, has been awarded a contract for upgrades and improvements to roads, bridges and drainage facilities for the Nogliki to Okha motor road.Work is expected to begin in early February 2003, and be completed by October 2003. Under this scope of work, a total of 15 bridges will be replaced, 1 bridge will be repaired, 13 new culverts will be installed, and 3 culverts repaired.
Financial and Industrial Group "Baltic Construction Company" is one of the largest civil and industrial contractors in the Russian Federation, with multimillion dollar contracts underway in many locations throughout the country.
Exxon Neftegas Limited is committed to improvement of the public infrastructure on Sakhalin, and this contract is part of the $US 40.3 million infrastructure development protocol signed between ENL and the Sakhalin Oblast Administration in August 2002. This contract, which is managed by Exxon Neftegas Limited, is jointly funded with the Sakhalin-II project developer, Sakhalin Energy Investment Company (SEIC). The contract adds to an already significant proportion of local content contracts in the two major Sakhalin oil and gas projects. In the case of the Sakhalin-1 Project, the value of contracts awarded to Russian contractors and suppliers is estimated to total approximately $US 1.7 billion since the Project began.
According to Neil Duffin, President of ENL, since the Sakhalin-1 Project moved into the development phase, Project spending has increased significantly, resulting in a greater number of contracts being awarded to Russian companies.
The Sakhalin-1 Project, the largest foreign direct investment project in Russia, has recoverable resources of approximately 2.3 billion barrels of oil and 17 trillion cubic feet of gas. The Sakhalin-1 Consortium plans to develop the project in four phases. The first phase, with development costs of around $US 4 billion, will focus on planned oil production, with limited gas supplies available to help meet the Russian domestic demand. First oil production from the Chayvo field is scheduled to commence at the end of 2005, and reach a daily plateau rate of around 250,000 barrels.
In addition to ENL (30 % interest, operator), the Sakhalin-1 Consortium members are the Japanese company Sakhalin Oil and Gas Development Co., Ltd. (30 %), Indian company ONGC Videsh Ltd. (20 %) and two Russian companies, Sakhalinmorneftegas-Shelf (11.5 %) and RN-Astra (8.5 %).
For more information, please contact:
Glenn Waller (Moscow 095 564-8950) or Michael Allen (Yuzhno-Sakhalinsk 4242 468 812) or logon to www.sakhalin1.ru