By Nidhi Verma
NEW DELHI (Reuters) - Russia has restored oil output at its Sakhalin-1 project after struggling with production following the exit of previous operator Exxon Mobil Corp (NYSE:XOM) due to sanctions, an industry source said.
Oil output from Russia's Sakhalin-1 project has recovered to 140,000-150,000 barrels per day (bpd), about 65% of the capacity and will soon hit full level of about 220,000 bpd, an industry source familiar with the matter said on Monday. Sakhalin-1 output collapsed after Exxon issued force majeure and abandoned the offshore project due to Western sanctions.
Western countries and their allies imposed various sanctions on Russia after Moscow sent its troops to Ukraine for a "special military operation" in February last year. Moscow retaliated by blocking foreign investors' assets, seizing them in some cases. Oil output of Sakhalin-1 is expected to reach near the peak level of about 200,000-220,000 bpd in "three to four weeks", said the source, who declined to be named as he is not authorised to speak to media.
Russia has established a new entity, managed by a Rosneft subsidiary, that owns investor's rights in Sakhalin-1 after the exit of ExxonMobil.
Russia last year approved requests of India's ONGC Videsh, the overseas investment arm of state-run Oil and Natural Gas Corp, and Sakhalin Oil and Gas Development Co (SODECO), a consortium of Japanese firms, to retain their 20% and 30% stake respectively in the project.
This source said the new entity, in which Indian and Japanese investors have a stake, had sought views from the partners on new ways to operate the project.
This source also said India's ONGC is unlikely to get any parcel of Sokol crude, produced from Sakhalin-1, in this fiscal year to March 2023.
Rosneft did not immediately reply to a request for comment.