Project History
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 5-year exploration period. , The Exploration Period included drilling of 7 appraisal wells and acquisition of more than 1,200 square kilometers of three-dimensional seismic data. The appraisal work under the PSA, along with prior exploration work conducted during the 1970s and 80s, delineated Sakhalin-1 hydrocarbon resources totaling 2.3 billion barrels of oil (307 million tons) and 17.1 trillion cubic feet of gas (485 billion cubic meters).
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.
The Sakhalin-1 Consortium declared the project commercial on October 29, 2001, and the Russian Federation approved the declaration on December 3, 2001, which formally ended the Exploration Period and commenced the 20-year Development Period under the PSA.
In 2004, the Russian Government approved the Technical and Economic Substantiation for Construction, which allowed Sakhalin-1 to start full-scale construction of the project facilities. The initial phase is the development of Chayvo, followed by the future phases of Odoptu and Arkutun-Dagi.
Production from Chayvo started in October 2005. The Project was initially producing up to 50,000 barrels (6,300 metric tons) of oil per day, which were sold to Russian Far East domestic customer before commissioning of the Project export system. Natural gas production also began in October 2005 to meet needs of domestic customers in the Khabarovsk Krai and initially averaged 60 million cubic feet (1.7 million cubic meters) per day.
The Sakhalin-1 Project oil export system was commissioned in August 2006. With the commissioning of the system, the crude produced by the Project is now supplied to international markets, to the greater benefit of the Sakhalin-1 Consortium and the Russian state.
The Onshore Production Facility (OPF) started up in October 2006 and ahead of schedule, allowing ramp-up of oil production to a targeted peak rate of 250,000 barrels (34,000 metric tons) of oil per day in February 2007. Natural gas supplies to Khabarovsk Krai have now grown to a 2007 average supply rate of 115 million cubic feet (3.27 million cubic meters) per day, and reached a peak rate of 200 million cubic feet/day (5.85 million cubic meters/day) in January 2008.
Later project developments are expected to sustain export gas production from all three fields to 2050.