SAKHALIN-1 BREAKS GROUND FOR A SECOND YEAR OF SMALL BUSINESS FINANCING PROGRAM
Yuzhno-Sakhalinsk, November 1, 2005. -- Exxon Neftegas Limited (ENL), the operator of the Sakhalin-1 oil and gas project, and the participants in the Sakhalin-1 Consortium announced today that they have provided a second tranche of loan funds to launch a program of small business financing for entrepreneurs in Okha District. This is the next phase of a successfully developing North Sakhalin Credit Program (NSCP) which was implemented in Nogliki last year.The program was organized by Sakhalin Small Business Development Fund (SSBDF), with financial support of the United States Agency for International Development (USAID). In 2004, NSCP was launched in Nogliki thanks to Sakhalin-1 contributing loan capital. NSCP became an extension of the Sakhalin Regional Small Business Credit Program, which has been operating in the South of Sakhalin since 2000. As a result the total budget of the program will amount to over US$1 million.
Last year, the program's Nogliki office loaned a total of US$300, 000 to 24 small and medium-sized businesses, creating about 120 new jobs in the district. The program's most important feature is its focus on providing loans to such start-up small businesses who have good business plans, but for a variety of reasons lack a credit history or the required collateral, and are unable to obtain credit from commercial banks. Encouraged by the success of this program, SSBDF opened a new office in Okha at 19-1, Karl Marks St. and is already working with the first group of customers.
SSBDF Director Ken Smith said "the demand for these loans has outstripped our expectations. There's more life in small business in North Sakhalin than we thought, and a lot of that is tied to the shelf developments." ENL Vice President Mark Hackney commented: "...our intent was to give these small businessmen a hand-up, not a hand-out, so that the local community could better take advantage of the business opportunity of Sakhalin-1 investment in their districts."
The Sakhalin-1 project includes the Chayvo, Odoptu, and Arkutun-Dagi fields. Over the life of the Project it is planned to produce approximately 307 million tons of oil (2.3 billion barrels) and 485 billion cubic meters of gas (17 trillion cubic feet). In addition to Exxon Neftegas Limited (30% participating interest and the operator of the project), the Sakhalin-1 Consortium includes a Japanese company - Sakhalin Oil and Gas Development Co., Ltd. (30%), an Indian company - ONGC Videsh Limited (20%), and two Russian companies - Sakhalinmorneftegas-Shelf (11.5%) and RN-Astra (8.5%).
For more information on the Sakhalin-1 project please contact Michael Allen (Yuzhno-Sakhalinsk - 4242-678812), or visit the Sakhalin-1 website (www.sakhalin1.ru and www.sakhalin1.com).