Russia starts production of oil, gas project in Far East

MOSCOW, Oct. 2 (Xinhua) -- A major oil and natural gas project off the Sakhalin island began its industrial production Sunday as Russia looks increasingly to its Far East region to tap energy reserves.

Some of Russia's largest oil and gas fields are located off Sakhalin island. The Sakhalin-1 project is a development of three fields on the northeast of the island. Total recoverable reserves are estimated to be over 300 million tons of oil and 485 billion cubic meters of natural gas.

As the initial phase of the Sakhalin-1 project, oil output from the Chayvo field in northeast Sakhalin island will reach 50,000 barrels per day (bpd) by the year's end and will ramp up to 250, 000 bpd by the end of 2006, Exxon Neftegas, the project's operator, said in a press release.

Natural gas would be delivered to Asian countries through a pipeline in the future and oil would be shipped abroad via an oil- loading terminal in the Far Eastern city of Khabarovsk, Exxon Neftegas said.

With a planned total capital investment of 12 billion US dollars, the Sakhalin-1 project is one of the largest foreign direct investment in Russia. US oil giant ExxonMobil holds a 30- percent stake in Exxon Neftegas. Also participating in the project are two Russian, a Japanese and an Indian companies.