Sakhalin-1 Project: Delivering Excellence in Project Execution
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Case Details:
Case Code : OPER093
Case Length : 26 Pages
Period : 1993-2009
Organization : Exxon Neftegas Limited / Sakhalin-1 consortium
Pub Date : 2010
Teaching Note :Not Available Countries : Russia
Industry : Oil & Gas Industry
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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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Excerpts
Background Note
Sakhalin, one of largest islands in Russia, is located off the east coast of Russia in the Sea of Okhotsk. Colonized by Russia and Japan in the 18th and 19th centuries, the island came under Russian control in 1875...
Exploration and Project Documentation
In late 1993, the five-member consortium signed a Memorandum of Understanding with the Russian government to formulate the Sakhalin-1 production-sharing agreement (PSA).The PSA, considered as the governing document for the Sakhalin-1 Project, required about two years to negotiate...
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Development
The Sakhalin-1 Project was executed in phases. According to analysts, a phased development approach was followed so that the procedures built in the first phase could be used in the future phases, thereby making the project cost-effective...
Phase I - Development of Chayvo Field
The first phase of the Sakhalin 1 Project focused on oil and limited natural gas production from the Chayvo field. The development costs of this phase were expected to be about US$ 4 billion. The initial phase was expected to produce 50,000 barrels (6,300 metric tons) of oil per day by the end of 2005.
By 2006, the production was expected to reach 250,000 barrels (33,000 metric tons) of oil per day. The development of oil from the initial phase of the Sakhalin-1 Project began on October 2, 2005. The time period of Phase I of the Project was about five years...
Excerpts Contd...>>
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