|
|||||||
|
 |
||||
 |
||||
Sakhalin: The next wave By Nicholas Bruneau. We have known for a long time that Sakhalin is an island which holds major hydrocarbon resources, yet only now are we exploiting this potential. Now the island is moving towards new horizons: offshore fields are being developed, multinationals are producing, contractors are arriving and the local communities are growing. All the major players are involved, since these are huge projects, even by international standards. Investment is predicted to reach approximately $13 billion over the next four years. However, due to the high level of bureaucracy and complexities of the Russian market, foreign multinationals have had to court Russian oil giants in order to win tenders and benefit from local expertise. The partnership of BP with the Russian company Rosneft is an example of this type of partnership, says Jens Pace, President of BP Sakhalin. "It is a constructive working relationship", says Pace, "whereby Rosneft can secure exploration licenses and we can provide funding and technology for them." Sakhalin Energy, the consortium led by Shell, is hinting that it might follow BP's example and join forces with Gazprom, the state Russian gas monopoly, in order increase its Russian participation and facilitate legal project approvals. "If you have a shareholder with a great deal of local knowledge like Gazprom, this could greatly contribute to certain issues such as approvals. The shareholders would combine Russian knowledge and western knowledge, which would be beneficial to develop new solutions to particular problems" says Ian G. Craig, Chief Executive Officer of Sakhalin Energy. "Gazprom could also help in terms of increasing Russian content and contributing through local knowledge" adds Craig. In fact, Russian content is a pre-requisite to operate in Russia under Product Sharing Agreements (PSA), and so far Sakhalin Energy is far below its necessary quota. "As far as Sakhalin 2 is concerned, the rate of Russian participation is only at 45%, which is a great concern" comments Dr. Galina N. Pavlova, Director of the Department of Oil and Gas Complex of the Sakhalin Region. "Our goal is to reach 70% of Russian participation for each project" she adds. After Moscow, Sakhalin is the region that receives the highest amount of foreign investment in Russia, thereby creating a spin-off effect on this small island which used to be wholly dependent on the fishing and logging industries. Infrastructure development is planned to help cope with new projects, construction is changing the face of the cities and contractors are arriving on the island every day, hoping to win new tenders and tap into the business opportunities of this promising market. It is a booming environment that can only be compared to the rich discoveries found in Alaska two decades ago. "It is certainly a boom town scenario" says Stephen Terni, President, Exxon Neftegas. "Yet the progress is remarkable - only in a few years I have seen remarkable changes and benefits on the island". Energy consumption is expected to rise substantially in Asia over the next 20 years - by approximately 9% in China, 12% in India, 14% in Japan and 19% in South Korea - and China is in talks with Russian authorities to diversify energy sources away from the Middle East. Even the state of California is now buying Sakhalin's natural gas in order to compensate for a lack of local energy sources. Taking into account these global interest for oil and gas resources, it seems certain that Sakhalin will continue to boom for many years to come. Interviews
Company Profile
|
|
|||
|
|
|
Make World Investment News Your Homepage. |