For those of you unfamiliar with Russian oil production, and I would recommend Grace’s Russian Oil Supply in that case, Sakhalin Island is the most Easterly of the Russian oil fields.
Location of Sakhalin Island just north of Japan (Google Earth)
It has been just over a year since a new export facility at the island (see map below) transformed oil exports from being a seasonal affair, closing with the ice of winter, into an all-year effort. This was due to completion of an offshore loading facility and thus by July it was possible to report:
“Our 200th oil cargo is clear evidence of Sakhalin’s emerging role as a key energy hub for the Asia-Pacific region,” said Sakhalin Energy Chief Executive Officer Ian Craig. “The increasing frequency of oil cargo shipments will also be matched and then exceeded by the frequency of LNG shipments as we build up to plateau in the second half of this year”.The oil is from platforms on the north-east end of the island, and the oil is brought onshore, and then piped 500 miles to the southern tip of the island where it is loaded onto tankers at a single point mooring facility at De Kastri. The main markets have been in South Korea and Japan. And, as an aside, the use of tankers does not mean that there is much warming up there (temperatures can reach -40C), there are two ice breakers available to help and guide the tankers.
Sakhalin Island was originally a penal colony and is relatively inhospitable but yet has been seen as promising as an area for further development.
An estimated 45 billion barrels of oil equivalent lie beneath the icy seas off its shores, a figure rivaling what remains in the U.S. or Europe. But developing those resources is proving lengthy, difficult, and expensive. Cost overruns have been huge, and no one knows if the Russians will end up controlling the assets now being built. "This is a frontier project like the North Sea or Alaska [was]," says Ian Craig, CEO of Sakhalin Energy Investment Co. "The industry doesn't know how to do everything" here yet.It is not that easy to reach.
The island is located seven time zones, and a nine-hour flight, from Moscow. That's the first part of the journey. Expatriate oil workers and visitors then board the train that runs north from Yuzhno-Sakhalinsk to Nogliki, the snowy gateway to the offshore oil fields. Sakhalin Energy maintains its own sleeping car with wood paneling, rugs, and burly, tattooed guards to fend off bandits. Passengers board in the evening and toss and turn on narrow bunks in steamy cabins while the train bumps and clatters for 15 hours through the snowy wastes. Sakhalin Energy's operations in the north are so remote that it had to build a 43-mile road to get there. Bears roam the woods, and the weather is so bad that construction manager John Burn hires 70 people to keep the area clear of snow and ice six months a year.The development of the fuel fields has been divided into a number of parts. The largest is Sakhalin II which began with the first oil platform Molikpak located at the Piltun-Astokhskoye field in 1999. That set of fields lies north of the Sakhalin I set of fields.
The Molpak rig ( air1Okuzya at Google Earth 52 37’31.77” N 143 26’02.91E)
Sakhalin I - the subject of the Reuters piece I quoted at the top of the post - is located on the north-east side of the island.
The Sakhalin-1 Project is an oil and gas development on the northeast shelf of Sakhalin Island. It was declared commercial in October, 2001. The Project area is comprised of the Chayvo, Odoptu and Arkutun-Dagi fields. Total recoverable reserves are estimated to be 2.3 billion barrels of oil (307 million tons) and 17.1 trillion cubic feet of natural gas (485 billion cubic meters).The project is being run by a subsidiary of ExxonMobil, with current plans to start production from the Odoptu field in the second half of this year. Production to date having come from the Chayvo field.
ExxonMobil “Hawk: drilling platform at Chayvo (Superparty at Google Earth 52 29’20.08”N 143 14’13.17”E)
ExxonMobil has written a short book on the project of some 9 pdf files. It notes that Phase I of the project reached its peak production of 250,000 bd in 2007. The drilling rig shown above is 22 stories high and is being used to drill extended reach wells that reach out up to 7 miles offshore. The two other fields that are now to be developed are further offshore.
The oilfields and pipeline for Sakhalin I (ExxonMobil )
The Orlan (or Sea Eagle) platform, which is offshore, has a target of production from 18 extended reach wells that extend out to 5.6 miles from the platform. It is expected that the overall production from the three fields will continue in production for some 40 years.
The Hawk rig has just completed the first two extended reach wells reaching out some 5.6 miles with horizontal wells to the Odoptu field, and will drill another five to bring that field into production by the end of the year.