“Berkut” Rig to Start Operation for Sakhalin-1

June 24, 2012

onshore rig and “Orlan” platform. Potential reserves are estimated at 307 million tons (2.3 billion bbl.) of oil and 485 bcm (17.1 Tscf) of natural gas.

   Together, the three fields should provide a stable production of hydrocarbons up to 2055. For the 5.5 years, Exxon Neftegas exported 47 million tons of oil. “We are very proud of “Sakhalin-1”, this is our best project in the world, including the safety parameters”, said Waller.

   Participating companies expect Arkutun-Dagi oil to boost the Sakhalin-1 production levels, which have been sliding for the past three years (see the table). However, Glenn Waller told reporters that Odoptu field “was better than expected”, explaining that it isn’t a re-evaluation of stocks but rather an increase in daily production. According to the Exxon Neftegas head, production growth at Chayvo might not be huge, but it will fully compensate the fall and “reach the plateau”.

   The company will announce concrete figures in six months’ time. Company’s earlier 2011 plans for Odoptu specified production at the level of 35,000-36,000 b/d, or 1.5 million tons per annum. For Chayvo, the figures were 120,000-125,000 b/d (in 2010 – 140,000 b/d) and 5.9 million tons, respectively.
The launch of Arkutun-Dagi field will slow down the fall of Sakhalin-1 production levels, even stabilizing it for a time, but the period of sustainable production will depend on the volume of the reserves, says IFD “Capital” analyst Vitaly Kryukov.

Mass Production of the Platforms

   Rosneft and ExxonMobil will need at least 15 more offshore platforms for their joint projects in the Kara Sea. “I think the Berkut is only the first platform, we will have dozens of other platforms. We will learn from this experience and try to replicate it in other projects”, said Glenn Waller.

   Project participants declined to reveal the cost of the platform. The rig cost ranges from 5 to 30 billion rubles (from about $154 mln to $924 mln), says Dmitry Alexandrov, head of the analytical studies at Univer managing company. For example, the price of sunken Kolskaya rig was about 3 billion rubles ($92.5 mln), while its replacement, a new rig, would cost about 7.5 billion rubles ($231.1 mln). The expert estimates cost of Berkut as closer to the upper limit.
The Russian companies still do not have enough experience in rig construction, so some of the orders (mainly from private companies) will be done by foreign contractors, says Dmitry Alexandrov. Russia is keen to fast-track the rig construction program, learning from the “Prirazlomnaya” platform experience. That rig was in construction for over ten years; eventually its cost exceeded $3 billion. “The slowdown in Prirazlomnaya construction happened because at that time no additional oil was required”, says Dmitry Alexandrov. “Also, there were questions on infrastructure, people in government and in Gazprom were being shuffled. Were the question of starting production at the Prirazlomnoye field urgent, the platform would have been, hopefully, finished on time”.
The present reality poses other challenges to the oil industry. Existing