SAKHALIN-1 AWARDS ADDITIONAL BRIDGE CONSTRUCTION WORK UNDER $40 MILLION PROTOCOL WITH SAKHALIN OBLAST ADMINISTRATION
YUZHNO-SAKHALINSK, April 3, 2003 -- Exxon Neftegas Limited (ENL), operator for the Sakhalin-1 Consortium, announced today that Baltic Construction Company, one of the largest civil and industrial contractors in Russia, has been awarded a contract to replace three bridges and associated approaches north of Piltun, on the Yuzhno-Sakhalinsk-Okha-Moskal'vo motor road.Work is expected to be completed in October 2003. Design work was done by Sakhavtodor.
This contract is in addition to previous awards to Baltic Construction Company as part of a $US 40 million infrastructure development protocol signed between ENL and the Sakhalin Oblast Administration in August 2002. The contract also adds to an already significant proportion of local content contracts in the Sakhalin-1 oil and gas project. The value of contracts awarded to Russian contractors and suppliers under the Sakhalin-1 Project 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 more than $US 4.6 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:
Michael Allen (Yuzhno-Sakhalinsk 4242 468 812) or logon to www.sakhalin1.ru